Posted on 12/13/2005 7:09:38 AM PST by 2banana
Sellers chop asking prices as housing market slows
Cuts of up to 20% are now common as analysts see signs of a 'hard landing'
Boston-area homeowners trying to sell their houses are sharply reducing asking prices -- in some cases, by $100,000 or more -- in response to the sudden slowdown in the real estate market.
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The median price of a single-family home in Massachusetts has dropped 7 percent in the past two months, to $349,000 for sales that closed in October. But reductions in asking prices of 10 percent or 20 percent are now common in both high and moderately priced neighborhoods, according to real estate agents and listings of homes for sale. In Cambridge, price cuts averaged $300,000 in a sampling of a dozen houses listed in the $1.25 million to $4.3 million price range. In suburbs like Tewksbury and Hopkinton, homes originally listed for around $500,000 have been slashed to the low $400,000s.
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Some houses are now listed below what buyers paid a few months ago for a similar house, making it very difficult for real estate agents to estimate an asking price for clients.
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Statewide, 38,418 houses had priced reductions between Jan. 1 and Nov. 24, or 22 percent more than the number of reductions during the same period in 2004. But the number of price reductions on homes between $500,000 and $1 million increased by 36 percent. One price segment that ''jumps off the page as soft," said Wendel, is the $500,000 to $600,000 price range, the fourth most active segment of the single-family housing market. It had 1,258 more markdowns, up 40 percent from last year.
(Excerpt) Read more at boston.com ...
I am thinking...
We have at least 2 years of this before buying into some good bargins - however - now is the time to prepare. Put some cash away, brush up on skills, research, talk with people who know your area, maybe even get your RE license...
I have a good friend up here - we are both pretty handy. We have agreed to start buying rental properties together in the next 2-3 years.
Bottom line we both agree upon. It has to make financial sense - That the property will pay for itself with rents - ie - we are not going to subsidize anyone to live in one of our properties.
It will get ugly. For rents to cover costs as they are today - housing basically has to come down by 50% in many markets.
Boston???? They would have to PAY me to live there, and then I'd only be staying there. Sleeping among the enemy.
Supply has stabilized around Northern VA. The inventory is still about twice as high as the previous few years, but a lot of that is unsellable junk like overpriced tear-downs. The high end market will continue to be soft and tract mansions and many condos will need to be marketed 5-10% under last June's price, but the 500k single family market is still strong.
An appraisal determines that a house can sell for $450,000
Homeowner says, "Nah, I can get more than that! Prices are skyrocketing!"
House goes on market for $500,000
House doesn't sell.
Price drops to $450,0000
House sells
Media reports Bursting Bubble
Who the hell would want to live in Boston anymore???
The Townhas become so infested with perverts, crooks
and anti-human socialists...That they keep electing
the two biggest scumrats we *have* in Congress.
The beacon of Liberty that Boston Used to be..is
now a secondary beacon of libetine degeneracy, second
only to the likes of HollyPuke, Buttstank &
Sam Franksuckso.
Diseased creatures abound in these dens of filth.
One small cautionary note..In liberal Mass, tenants have rights..landlords don't...so be very careful..
Who would pay 400K to freeze their a** off in Boston?
My appraised value is unchanged over the past 4 years, and I live 1/2 mile from the Cowboys complex.
I'm not worried, though. There are patio homes a few blocks away that are selling for $275-300K, and none of them is a spec home. Mine's about 2500SF, and current market is a bit over $230K.
I'm not looking to move anyway. My wife has a 10 minute commute, the schools are good, and our local parish is outstanding. Once I find a job that gets me closer to home (instead of downtown Dallas), I'll be even happier.
One word of advice...reconsider partnering with your friend. Find a way to swing it on your own.
I am using interest only loans on two of my properties - under these terms only - ten years of I/O at 6.125 then twenty years P&I at the same rate. The rents cover the low payment plus an additional 50--60%. I use that to write down the principal each month. This reduces the following month's payment allowing for a greater piece of the principal to be paid which decreases the next month's payment even more etc....At this rate the principal will be reduced by 60-70% when the standard P&I period commences...with a locked in rate of 6.125%, regardless of the then prevailing rate.
The danger to this method is only your own discipline. If you don't use the overage to write down the principal then when the P&I period starts you will find yourself with a significantly higher payment and you will pay interest on the same money twice.
***The median price of a single-family home in Massachusetts has dropped 7 percent in the past two months, to $349,000 for sales that closed in October.***
$349,000 for a median priced home?/ No way I could ever live there. These people are making too much money.
Where I live you can't even buy a nice one-bedroom condo for 349K.
No kidding. Temperatures are runing WAY BELOW normal in New England this week...heating bills are going to be astronomical this winter. Massachusetts is losing so much population that it is widely believed that they will LOSE two Congressmen after the 2010 census. (See ya, Barney!) I wouldn't pay 40K to live in New England, much less 400K. Out of here next spring.
bump
I know this because folks from Boston and Jersey tell me all them time how terrible it is when compared to "back home". Of course, they don't dare move back. They would rather stay here and make us miserable with their constant complaining.
The winter months were always the best time to buy and the worst time to sell. I've always bought during the winter and sold during the summer. Usually I've saved between ten and twnety percent. The market is readjusting to it's regular ebb and flow, which means profits on housing will remain in the 5-10% range. Some areas will be assessed downwards perhaps even by 20%, but if you hold onto your real estate investment for ten years, you will generally see a profit.
Is this the same bubble Bush is supposed to be in?
Your message sounds too good to be true, but I live here in Spfd and am in that hi $5 price range. What information do you have that the market is strong?
For cash flow around the country try buyrentals.com
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