Category Archives: Home Value

Local Real Estate Value Trends North of Boston 128/93 Area

2015 was another great year!  A year ago, we were talking about the strong year we had in 2014 and here we are a year later and the experience has been pretty much the same.  We continue to show higher than historical volume, and values have increased as well.   Now, as we proceed along into 2016, I wanted to look at how much the market has changed in the past year as well as how we compare to the values of 2005 at the previous market high.

In Woburn, the single family market average sales price finished higher than the previous year.  Sales volume was higher too.  The higher volume occurred in spite of the low inventory levels throughout the year.    On a relative basis, Woburn is more affordable than the other local towns, but maintains a similar growth in home value.  Interest rates remained low and this contributed to first time buyers being able to afford homes even as prices increased.  Interest rates in 2016 are expected to rise slightly.

Looking back over 2015, in the north of Boston area, we saw market time decrease, bidding wars with multiple offers, fewer distressed homes, and continued overall positive feeling about the market.

Statistics and trends are a favorite tool for me.  I can get a sense of where the market is going by looking at the indicators.  Although I have created charts for many individual towns, my favorite chart, which is included with this blog, is of the local 128/93 towns compared to each other.  These include Reading, Burlington, Melrose, Stoneham, Wakefield, Wilmington and Woburn.

Here is a table for these local towns that captures the trend data:

Town Average Sale Price

2015

% Change

2014 to 2015

% Change

from 2005 High

Reading $553,508 +6.47% +15.19%
Burlington $547,275 +6.82% +24.01%
Melrose $528,488 +6.50% +16.56%
Stoneham $494,653 +7.16% +9.19%
Wakefield $492,971 +4.90% +9.50%
Wilmington $461,574 +9.08% +1.71%
Woburn $438,681 +8.47% +8.47%

 

Interestingly, all of the local towns have shown strong gains over the previous year.  A year ago, not all of the towns had exceeded the highs of 2005, but at the end of 2015, all have surpassed the highs of 2005.   Looking ahead, let’s hope for continued growth in local real estate values, and a continued strong real estate market.

Mulittown

Roland Crop 2011 jpeg (1)About the Author: Roland Spadafora is one of the broker owners of RE/MAX Legacy and is known around the office as the expert in market trends and stats. You can learn more about him on his website www.spadaforateam.com

 


2014 was a great year!  We ended the year with higher than typical volume and increased home values.  As we enter 2015, I wanted to look at how much the market has changed in the past year as well as how we compare to the values of 2005 at the previous market high.

In Woburn, the single family market finished higher than the previous year, and the volume although lower, was still higher than historical averages.  Fewer homes were sold, mainly due to a lower inventory.  On a relative basis, Woburn is more affordable than the other local towns, but maintains a similar growth in home value.  Interest rates remain low and had actually dropped over the course of 2014.  The experts predict higher rates in 2015, so a buyer waiting on the sidelines should see this as an optimum time to buy.  Rates could go up, and at least for now, prices are moving up as well.

Looking back over 2014, in the north of Boston area, we saw market time decrease, bidding wars, especially on lower priced homes in need of renovation, fewer distressed homes, and an overall positive feeling about the market.

Statistics and trends are a favorite tool for me.  I can get a sense of where the market is going by looking at the indicators.  Although I have created charts for many individual towns, my favorite chart, which is included with this blog, is of the local 128/93 towns compared to each other.  These include Reading, Burlington, Melrose, Wakefield, Stoneham, Wilmington and Woburn.

Here is a table for these local towns that captures the trend data:

Town Average Sale Price Last 12 Months % Change Last 12 Months % Change from 2005 High
Reading $520,571 +5.73% +8.33%
Burlington $512,312 +14.36% +16.09%
Melrose $497,182 +13.37% +9.66%
Wakefield $468,245 +4.20% +4.00%
Stoneham $461,611 +4.59% +1.90%
Wilmington $423,375 +8.11% -6.71%
Woburn $404,169 +6.43% -1.93%

Interestingly, all of the local towns have shown strong gains over the previous year.  Most of the towns have exceeded the highs of 2005 when the market reached its peak (and just before the economy sent prices downward).  Only Wilmington and Woburn have not returned to the levels attained in 2005.  Looking ahead, let’s hope for continued gains in local real estate values, and thus a continued strong real estate market.

chart

 

Roland Crop 2011 jpeg (1)
About the author: Roland Spadafora is one of the broker owners of RE/MAX Legacy and is known around the office as the expert in market trends and stats. You can learn more about him on his website www.spadaforateam.com


appraisal guy 2There are a lot of misconceptions concerning the purpose and process of the appraisal report and the appraiser.
Let’s start with the person.  According to The Appraisal Foundation, “an appraiser is one who develops and reports an opinion of value on a specific type of property”.

 

This definition leads us to the purpose of the appraisal.
The reporting of the OPINION of value is what we call the appraisal.  Note, my over exaggerated bold and capped OPINION.  I state this because most people believe that valuing a property is a science because it has all those numbers and numbers belong with equations which prove or disprove results.  This is not entirely the case for appraisals.  Appraisals are more like finely crafted pieces of art.  All kidding aside, the reason the appraisal is an art is largely in part because of the amount of emotion in real estate transactions.  How do you quantify emotion?  You step into your 49th open house and you just know.  You KNOW, again over-emphasizing here, this is your home and you are not going to lose it without a good fight to the finish.  You are even willing to, dare I say, over-pay for it.  Because you have falling for it.  Your emotions have made your decision for you.  Now don’t worry, you are just like the rest of us.  We all purchase based on how it makes us feel and how we believe it will make us feel in the future.  I do it every day.

 

The purpose of the appraisal report is primarily for the lenders (aka the Bank).  The appraisal simply reports to the bank what similar properties are selling for in the neighborhood.  The bank wants to know if similar “emotional” responses are consistent in the neighborhood.  Why?  Because every purchase of a home defines the market value of your property.  Market value, according to The Appraisal Institute, “The most probable price that the specified property interest should sell for in a competitive market after a reasonable exposure time, as of a specified date, in cash, or in terms equivalent to cash, under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, for self-interest, and assuming neither is under duress.”

 

For example, currently in the Metro Boston and Woburn area we are seeing some days on market, the number of days a property lists on the open market, at or below one week and we are seeing selling prices above asking prices (list price).  The appraisal report must report this and be consistent with what is happening in the current market.  This leads us to the process of the appraisal.

 

The process is similar for most appraisers.  The appraiser guy or gal comes to the property for inspection, interior and exterior.  They will research and view the neighborhood.  They will verify property data with the assessor and/or building inspector. They will research the market trends of the past year paying particular attention to what the current trends are within the past month to 3 months.  Then they will research sales in the neighborhood and pull the best available sales that most accurately reflect the subject property in terms of Location, Square Footage, Style, Age, Condition, Bedrooms, Bathrooms, Acreage, Amenities, Topography, View, Date of sale, Type of sale, Days on market, etc…  The comparable selection is like 5th grade science class when you dissected the frog saturated in formaldehyde.  It’s that experience you wish you could remember to forget.  After all the differences are valued out there is a range of value from the adjusted comparable sales.  The final estimated opinion of value is typically within this range.  The range, again, reflects the art of the appraisal because it is an opinion with the range.

 

There are various reasons, other than for a lending transaction, to have an appraisal completed on your property.  If you are ready to embark on a renovation project, better hold the horses and find out if your investment will have a good return.  I’ve saved families from making this mistake a few times.  What about if a loved one is reaching the end of their life and you are doing the final preparations for their will.  Finding the value of the home can help sort out any loose ends and help the family focus on what matters.  One other reason would be if a couple finds themselves unable to continue in marriage and needs to divorce.  Typically the largest asset to divide is the property.  You need an unbiased appraisal on the property in all these scenarios.

You can go to our website www.theappraiserguy.com to learn more by clicking the links.  The document added to this blog is from The Appraisal Institute and helps further distinguish the purpose and process of the appraisal.

 

TAF BorrowersInfographic

Wetland julianoWhen someone purchases a home near a wetland area, they usually never know it until an issue comes up.  Believe it or not, being next to these areas can restrict the use of your property.  It is critical that due diligence is used before you purchase the property, rather than finding out after you have closed.

The term “wetland” is a general term but usually encompasses any pond, lake, river, stream, ocean, or any land that is subject to flooding or where the water table is constantly high.  These areas are protected under the Massachusetts Wetlands Protection Act, Department of Environmental Protection (DEP) Regulations, and local Bylaws and Ordinances.  The purpose of these laws is to protect these resource areas from damage.

If you own property within a certain distance from these areas, DEP and the municipality you live in have jurisdiction to regulate activities in or near wetlands or water bodies by imposing certain measures.  For example, if you live near a wetland and wish to construct a shed on your property, you cannot simply just construct a shed.  You must go before the local Conservation Commission and petition that they allow the construction of the shed.  Their job is to ensure that the construction of the shed will not damage or ruin the integrity of the existing wetland by such construction.   Such petition could cost you money and time.

It is important to do thorough due diligence about the property before you sign the purchase and sales agreement. If the property falls under the jurisdiction of DEP and the municipality due to the property’s proximity of a wetland, it is always better to find out before you have invested time and money into the property.  A good start is to go to the local conservation office in City Hall and ask the conservation administrator about the property.   They will inform you if the property abuts a wetland and if so, if the property is in compliance with all local and state regulations.

Juliano blog headshot photoJames A. Juliano is one of the founding partners of Scafidi Juliano & Hurd, LLP, managing the Woburn office location in Downtown Woburn Center.  He currently has served for the past two years on the Woburn Conservation Commission, and was former chairman of the Stoneham Conservation Commission for 4 years.   Mr. Juliano is currently an active member in the Woburn Residents Environmental Network (WREN) and is a Director of the Friends of the Tri-Community Greenway, Inc. which is a non-profit corporation responsible for the formation and organization of the 6.63 mile bike path and park that will stretch through Stoneham, Woburn, and Winchester.  Mr. Juliano is also very active with the Eastern Middlesex Association of Realtors (EMAR) and serves on the Board of Directors for the Women’s Council of Realtors – Northern Region Massachusetts Chapter.

Mr. Juliano’s present areas of practice include residential and commercial real estate transactions, residential and commercial lending, land use and zoning, and Landlord/Tenant law.  Mr. Juliano can be reached at jjuliano@sjh-law.com or by phone at 781-210-4710, Ext. 102. His company website is www.sjh-law.com


No one can deny that we are in an awkward stage in real estate right now.  With homes selling well above asking price due to low inventory and high demand, it is impossible to know the true value of a home at the inception of the listing.  Unfortunately, those days of relying on previous comparable sales are out the window and such homes are only used as a mere gauge when listing a property.  As a result of such pricing flux, appraisals are often and frequently conflicting.   This can sometimes pose a problem for both parties in the transaction.

In a typical transaction where the Buyer is seeking financing from an institutional lender,  the Buyer’s lender sends an appraiser out to the property in order to set a value to the home.  Said value is based on several factors including but not limited to: the home’s physical makeup (square footage, number of bedrooms/bathrooms, amenities, etc.), where it is located, and most importantly, what other comparable homes in the area sold for in the last few months.  The last factor poses the biggest problem when determining a home’s value.  Because homes have only recently been selling higher than their actual values, there are not enough, if any, comparable homes that have sold within the past few months that reflect such pricing increase.  The end result…the home appraises for lower than the agreed upon price.

From a Buyer’s standpoint, this means that the lender will probably deny financing because the lender will not loan money for a property that is worth less than the agreed upon price.  If the Buyer’s lender will allow the Buyer to borrow money, it will usually require the Buyer putting more money down if they choose.   This result would usually allow the Buyer to contractually get out of the agreement and receive a full refund on all their deposits. From a Seller’s perspective, a decision must be made: either drop the purchase price to the appraised value, or find another Buyer.  Either situation is not ideal to a Seller.

Other scenarios however, can pose more complex situations and results.  In the case where a Buyer is paying cash and they opt to do an independent appraisal, the appraisal could come in lower than the agreed upon purchase price, which would alarm the Buyer that they may be overpaying for a home.  In another case where the Buyer is only financing a small amount of money where there is plenty of equity for the lender to finance the desired amount, it could be seen that the Buyer is overpaying for the home as well.  In these situations, it is always best to put a separate contingency in the Contract to Purchase and the Purchase and Sales Agreement which states something to the effect of “This Agreement is subject to the property appraising at or exceeding the purchase price, failing which all deposits given by Buyer shall be forthwith refunded and this agreement shall be null and void without any recourse to the Parties hereto.” This will allow the Buyer the option of either backing out of the contract if the property does not appraise for the contract price or purchasing the property despite  the appraised value being lower, hoping that the home’s appraised value will eventually increase. On the Seller’s end, a way to ensure that a Buyer will purchase the property despite a low appraisal is to insert a clause in the Contract to Purchase and the Purchase and Sales Agreement which states something like “In the event the appraisal is lower than the agreed upon purchase price, Buyer agrees that it shall not be the cause of termination of this agreement and shall be obligated to purchase the subject property subject to the terms of this agreement.”      

Because of what is going on in the market, it is vital to always seek guidance from a knowledgeable and reputable real estate agent and attorney.  The days of cookie cutter transactions are no longer with us and it is vital to have people in your corner during these times.

………………………………………………………………………………………..

Jim - October 2010James A. Juliano is one of the founding partners of Scafidi Juliano & Hurd, LLP, managing the Woburn office location in Downtown Woburn Center.  He currently serves on the Woburn Conservation Commission.  Mr. Juliano is currently an active member in the Woburn Residents Environmental Network (WREN) and is a Director of the Friends of the Tri-Community Greenway, Inc. which is a non-profit corporation responsible for the formation and organization of the 6.63 mile bike path and park that will stretch through Stoneham, Woburn, and Winchester.  Mr. Juliano is also very active with the Eastern Middlesex Association of Realtors (EMAR) and serves on the Board of Directors for the Women’s Council of Realtors – Northern Region Massachusetts Chapter.

Mr. Juliano’s present areas of practice include residential and commercial real estate transactions, residential and commercial lending, land use and zoning, and Landlord/Tenant law.  Mr. Juliano can be reached at jjuliano@scafidijuliano.com or by phone at 781-210-4710, Ext. 102.

 


Anyone who has been around the real estate business for 20 or more years has experienced the cycles that are part of real estate growth.  But one thing that we have all come to realize is that over the long haul, real estate increases in value and will almost always be a good investment.

In 2005/2006, our local values hit a peak, and began a descent or correction over the next several years.  Before 2005, we had experienced many years of single to double digit annual appreciation and then the “bubble burst”.  Over the next few years we experienced mostly downs with an occasional hiccup including the influence of the government sponsored “first time buyer credit”.  Interest rates remained low and went even lower and this provided some stimulus once the economic climate improved.  Watching the trends, we learn that we can never predict the bottom until we have turned around and begun heading back up.  As a buyer, I would not be as concerned with “nailing” the bottom, but would want to buy on either side of it.

The recent increase in sales, multiple offers and over asking offers all suggest that we have turned the corner.  The market has changed in favor of the most sellers and as a result it has become a difficult place to be a buyer.  But because we have not returned to the peak values of 2005, there are some homeowners who bought near or at the peak and would not benefit from selling at this time.

With my engineering background, statistics and trends are a favorite tool for me.  I can get a sense of where the market is going by looking at the indicators.  I’ve created trend charts reporting an annual statistic – average sale price for the 12 months of that year.  For the final data point as the current year progresses, I look at the last 12 months.

Although I have created charts for many individual towns, my favorite chart, which is included with this blog, is of the local 128/93 towns compared to each other.  These include Reading, Burlington, Wakefield, Stoneham, Melrose, Wilmington and Woburn. (click on the chart to enlarge)

chart2

Here is a table for the local towns that captures the trend data:

Town

Average   Sale Price

Last   12 Months

%   Change

Last   12 Months

%   Change

from   2005 High

Reading

$463,027

+7.89%

-3.64%

Burlington

$421,152

+10.20%

-4.57%

Wakefield

$417,540

+4.59%

-7.26%

Stoneham

$415,716

+13.27%

-8.24%

Melrose

$414,268

+0.54%

-8.63%

Wilmington

$378,862

+6.44%

-16.51%

Woburn

$359,952

+6.99%

-12.66%

 

In spite of the recent upswing and gains in average sale price, you can see that we have not come back to the highs of 2005.   However, let’s hope we continue in that direction.

About the author: Roland Spadafora is one of the broker owners of RE/MAX Legacy and is known around the office as the expert in market trends and stats. You can learn more about him on his website www.spadaforateam.com


Being in the mortgage business for over 17 years, the first question asked of me is what can I afford to buy?  I then answer their question with a question.  What do you want to afford?  The customer looks at me and says you’re the professional.  I ask, “Do you have a budget, do you know what all your bills are and what projected bills will be?”  How are you tracking this information?

It is sad to say but not many people prepare a household budget.  I believe the reason for this is because people don’t want to know or see what they spend their money on.  By putting it down on a spread sheet it makes you accountable for what you are doing with your money.

So back to your mortgage:  how can you make a decision on what you can spend on a home if you have no idea what you spend now!

So how do you start?  Just do it!  On a spread sheet start inputting bills as they come in and as you spend money.  Just by doing this one action you will find that you end up saving 25% more than you did prior to this.  Just being aware will make you not buy that extra coffee, candy bar, or shirt.

Below is a link to a great article to help start a budget.

http://money.cnn.com/magazines/moneymag/money101/lesson2/index.htm

Below is a link for free budget planning software.

https://www.moneysmart.gov.au/tools-and-resources/calculators-and-tools/budget-planner

So with this useful information, you can now determine where your money is going, how much can you save, and what you can afford for a mortgage and the cost of the home.

Now that you have this valuable information, it’s time to sit down with your qualified mortgage professional to see what you can pay for a house.

About the author: Fred DaMore is a Mortgage Specialist at Ross Mortgage. You can contact him at fred.damore@rossmortgageco.com

 


The spring market is here but, it seems a little different this year. Traditionally by April there are quite a few properties available for sale.  However in our current market this is not the case.  Listing inventory is down & when the supply does not meet the demand multiple offers and buyer frustration will follow.

When sale prices start to rise, it can also create a problem with bank appraisals.  Before a buyer can obtain a mortgage, the bank sends an appraiser to verify the sale price.  If there are not enough prior sales to compare, it can be difficult to justify the value. When this happens an adjustment must be made to either the sale price, or the buyer’s down payment. Otherwise the bank will not issue a commitment letter to the buyer.

In a market like this buyers have to be ready to sign on the dotted line if they want to be successful.  This is difficult to do when making such a big decision.  When investing a large amount of money time is needed to consider all options.

If you are thinking about selling, now is the time. The market is on the rise & with the lack of competition you could spring into a great deal!

About the Author: Sharon Potts is a Realtor at RE/MAX Legacy and looks forward to the  the spring market! You can contact her directly through her website at


The Real Estate Spring Market

What is the spring market?  Annually it is the period of time when buyers really step up their activity and search for a new home in earnest.  It typically follows the path of warmer weather, increased inventory (sellers wanting to sell) and falls in the period of time that would allow for a closing to occur well before the beginning of the school year in September.

 

But when does it actually begin?  As it turns out, there is no definitive answer and there are many factors that could influence it.  Some possible influences are:

Weather – A cold and/or snowy winter definitely impacts the real estate market.  Sellers are reluctant to put their home on the market and buyers mostly want to look at homes in more ideal weather conditions.

Economy – Fears of a recession, loss of jobs, or higher interest rates can all affect the buyer’s interest in buying a home.  In a bad economic year, sometimes the spring market never occurs, or it is delayed until there’s more optimism.

Government Buyer Incentive Programs – This may not be seen in the near future, but when there was an incentive with the First Time Buyer Tax Credit and a deadline to receive it, there was definitely an early and strong spring market that year.

Region/Location – Certainly the economic strength of a region or locale can influence the market.  The experience for my area, north of Boston, might be totally different than another part of the state or the country.  Knowing your market area is important so as to be prepared for whatever happens.

In my years as an active, full time agent, I have seen a wide spectrum of “spring markets”.  I have seen it begin as early as January 2nd, and sometimes as late as July. And at least once, it didn’t happen at all.   Every year is different, but when it happens, one must be ready….buyer, seller, agent, attorney and mortgage professional.  To me, it is part of what makes the real estate industry unique and exciting!   As for 2013, it’s too early to tell, but with rates low, prices bottoming and turning around, and buyer confidence continuing to be high, I am optimistic that this year it will be an early and “wild” spring market.

About the author: Roland Spadafora is a Realtor at RE/MAX Legacy and has experienced many “spring markets”. Find out more about him and his real estate team on his website  www.spadaforateam.com


Remember when Johnny Carson, the long time host of the Tonight Show would don his turban and become the character “Carnac the Magnificent”?  He would hold an envelope up to his head and provide the answer to the question that was hidden inside the envelope.  Well with regards to real estate, the answer is “it depends” and the question is “how’s the market?”   As a Realtor, I always hear that question from my friends, clients and fellow agents?

When I first became licensed in real estate in the 70’s, my broker owner told me whenever someone asked “how’s the market?”, we were to always answer “Great!”  I felt like I was doing a commercial for Frosted Flakes.

But after recently attending a 16 week course presented by Tom Ferry, I have learned what the best answer is to the question “How’s the market?”   And the answer is………it depends!  So what does it mean when I say “it depends”?  Well, are you a buyer, a seller, an investor, a renter?  Are you asking about single families, condominiums, multi-families, commercial?  Are you looking in the immediate local market or an entire region?  Your asking that question requires me (the agent) to probe further in order to provide the answer.

Let’s assume the person asking the question is a first time buyer, looking for a single family home in Woburn, and their maximum price is $300,000.  Here are some words I might use to describe the market for those parameters:  hot, competitive, low inventory, bidding wars, bank owned or short sale, needs work.

All in all, the single family market in Woburn has been very strong in 2012 with over 50% more sales in 2012 than 2011.  Average sales price has remained flat, and days on market is slightly lower than 2011.

If you are a buyer, seller, investor or a renter, and you ask your agent “how’s the market?”, be certain the answer is satisfactory to your specific needs.  By getting the right answer, you are on your way to achieving your real estate goals.

About the author: Roland Spadafora is one of the owners of RE/MAX Legacy and a seasoned Realtor who has been answering the “How’s the Market” question for over 30  years. You can learn more about him on his website www.spadaforateam.com