New Boston Globe RE Blogger

It's her first day, so I will let her off the hook. Stacey Myers, the replacement for Binya Appelbaum has posted a summary of a Money Magazine 2009 Housing Forecast which states Boston should drop 10.5% This forecast uses the Case/Schiller Index which tracks major metro markets. Of course, anyone who looks at the Boston data in the Money Magazine piece will see a startling median price of $363,000. Yup, the price of a tandem parking space in certain Boston neighborhoods.

What we learn from this, without even needing to scratch the surface in research, is the numbers are using all of Boston without consideration to the different neighborhoods. Yes, it's impossible for a national publication to break down a city by different neighborhoods, but isn't that what the Boston Globe pays its real estate writers to do? As often as I disagreed with what Binya wrote, at least he put some effort into it...

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World Series Trophy and Links

The World Series Trophy will be in Brookline tomorrow (Thursday the 26th).

In the news this week Mass housing prices have fallen 8.6% from last year, but Brookline's numbers are doing very well.

I was quoted in the cover story from the Homes section in The Boston Globe on Sunday. In essence, the question was whether or not an expensive garden would impact a sales price. My extended opinion is while it might not directly impact a sale price for a house it would help differentiate a house from competition in a crowded marketplace. From there, that might save the seller time and money in moving onto the next phase of their life.

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Telling you what you already knew.

"The overall pattern returns me to my musings last month about the possibility that towns closer to Boston are becoming more desirable than towns even one step further from the city. Most striking to me is that prices in Boston proper actually rose last month, for single-family homes and condominiums. Basically, Boston and its closest suburbs are chugging along, while almost everything outside that tight cluster looks pink around the gills. "

-- Binyamin Appelbaum, Boston Globe Real Estate Now Blog.

Now that we're fully talking about 1990/1991 in comparison to the current state of the Mass housing market, it is important to look back to the very basic needs and make buying decisions off of them. Brookline has historically grown even through these downturns. We have many reasons why Brookline is always a top performer. We see the current stats, yet we still hear in our minds that things should be crashing through the floor. We are in a good place here in Brookline, and we should be tremendously thankful for that. Property is still going under agreement just as fast, if not faster, than it is coming on. Remember, real estate was always about "location, location, location" and I cannot think of any better location than here. In our times of high gas prices and collapsing housing prices we have a town where you can walk most places you need to go and our housing prices are strong. What could be better?

Would you watch?

So, I've been thinking about the reach the Globe has on real estate news topics. What is the easiest way to take the news and shape it into useful information for our "local" market? What is our "local" market? My brokerage has done a great job of contracting someone to compile "Local Housing Data" graphs and charts (link on the right). I try to talk about Brookline-only topics on these pages. Although, when I look back to my own home search two years ago my wife and I looked in the South End, Back Bay, Cambridge and the Symphony neighborhood. So, is that our "local" market? I'll discuss this later....

Back to my point, if there was a tv show about "local" real estate topics, would you tune in? What would you want on it? Where would you like the focus to be? I've thought for a few months now about having round-table discussions. I do not want to have "seminars" because I think they never really hit the right market. You are speaking over the heads of some of the guests or way below the level of others and at the end of the day many people don't feel like coming back. What if there was a forum with a banker, a broker and an active buyer/seller? Maybe bring in some guest speakers to talk about short-sales, etc...? Would you come? Would having it on TV work better? Please, let me know what you think by clicking here.

Longwood Towers in Foreclosure

Lender to auction Brookline project - The Boston Globe

As the link above explains, the lender for the developers at Longwood Towers (20 Chapel St.) have begun foreclosure proceedings. What this normally means is an auction will be held for the remaining units. As far as I can tell the sell-out has not even approached 50% of the units originally listed in MLS.

Having worked on a large-scale sale of condos in one building before I can tell you that the process is very difficult. The biggest danger you have is people forgetting that you exist. With the prevalence of information out there buyers and their agents are bombarded daily with "what's new" in the real estate market. With that much volume in the market the condos which have been on the market for hundreds of days never get looked at.

I must take issue with the assumption that this project has fallen victim to the "market conditions." It is this segment of the marketplace that is actually one of the bright shining stars these days. So, what did happen?

1) From the start it was going to be very difficult to find almost 300 buyers who would be willing to spend close to $700 per square foot for small units.

2) If the developer wanted to ask those prices and establish that value they were going to need to be significantly closer to downtown.

3) Remember the location...there is NOTHING close to (and I mean simple walk a la the Mandarin Oriental or The Ritz Towers downtown) the intersection of Longwood Ave. and Chapel Street.

4) This location is perfect for medical professionals. The busy younger ones who have no time to eat or sleep, let alone find transportation into JP/Allston/Brighton/Washington Square at crazy hours of the day. How many of those people can qualify for a $600,000+ mortgage?

5) Poor marketing. If you look at the photos on MLS they tend to feature a dungeon-like lobby shot and a grainy exterior photo. This is a luxury property. There should be videos of the amenities, massive testimonials about the location, wonderful buy-in incentives, pictures and floorplans galore, etc...

6) Too many options. In just one listing I opened up I see "price includes selected upgrades" and "Valet Fee $135/mo" and "Complimentary Valet Parking." Ok, so I understand that each new owner would get to select some upgrades, but quite frankly the presentations tend to come off like a bait-and-switch routine in the minds of many consumers. Also, the "complimentary" parking is for visitors to the sales office, but just because I know that from experience does not mean it makes sense to the consumer at home on a Sunday morning.

7) CRAZY high condo fees. Honestly, I live in a 1300 sq. ft. 2 bed/2 bath in the middle of Coolidge Corner and my MORTGAGE is the same as some of these condo fees.

This is sad for the many people who paid what they were expecting to be "market price" for the early units. They will have to hold onto their condos for quite some time to see the return in investment. This building never fully made sense in my mind the way it was being presented to the public. The one thing the Brookline condo market has taught us is a building in that location should be fabulously successful. There is an incredible demand for housing at that location. The developers fancied some high-end luxury masterpiece, and I'm sorry but that location is not the proper spot for their dream.

Best Comment Ever in a Real Estate Blog

A poster on the Globe's real estate blog just posted the following comment following 17 posts of bickering. The comment is too good not to share. Enjoy!

To the uninitiated I offer a way to translate all of the real estate blogs:
"Now is the perfect time to buy" means I am a Realtor. "Now is a terrible time to buy" means that I have been waiting for houses to come down 30% for the last 15 years. "The housing bubble is the fault of greedy brokers and bankers" means I am a liberal. "The housing bubble was caused by people borrowing more than they could afford" means that I am a conservative."The housing bubble, like all things, will pass" means I am older than 30. "We have it tougher than anyone in history" means I am younger than 30. "Houses are too expensive" means I resent not being able to live as well as my parents do now. "Everyone is leaving Mass." means that I have been thinking about going to a state where no one will recognize me working at Starbucks. "The credit crunch will end life as we know it" means my parents are refusing to pay for graduate school and I have to get a real job thus ending life as I know it. "Seller's Agents are crooks" means that I think that I could sell my house without a loss if I could just do it for free. "Buyers agents are crooks" mean that I bet that I could afford the house of my dreams if it weren't for broker's commissions. "I know what I am talking about" means that I do not know what I am talking about. If I did, why would I be wasting my time on these blogs?

Please, normal people, run for your lives. The people on these sites are sitting at their terminals with tin foil hats waiting for Hale-Bopp to take them to the planet where houses are free, real estate agents and bankers are persecuted, and guys who play video games and go to Star Trek conventions are elevated to the status of gods. The future is uncertain. It always has been. One more click ain't going to do you any good. Log off and enjoy your life.

-- Comment #18 by "Sagatious Sally"

Is anything more volitile than the Boston Globe Real Estate Section?

The Globe's resident real estate blogger Binya Appelbaum has posted a piece that includes the map below. The blue outlined towns are showing an increase in median sales price for single family homes in the first two months of '08. The red are showing a decrease. To fit the criteria the town had to have 20 closed single family home sales. Brookline has only had 10 sales in this time period so we are left off the list. What I can tell you is the median price this year is $1,548,760. The median price from last year was $1,405,937. This is an increase of 10%. Binya, circle us in blue!

View from the trenches

In the past 3 weekends my colleagues and I have introduced three properties in "popular" neighborhoods that all received multiple offers. In each case none of the initial offers, despite the buyers being aware of the competitive bidding situation, reached the asking price. What was seen by all three sellers, with three very different homes, is that buyers are very cautiously submitting offers on property even in what had been considered "A+" locations. In the end two of the three properties went under agreement, and I'm sure the third isn't far behind, but I'm not sure if any of the three very popular listings will sell for full asking price. The other observation shared by all three listing agents is the drawn-out nature of the multi-offer negotiating process. In the past buyers saw the competition and one or two made a push to win the property. I think all parties would agree that in these cases the buyers gingerly approached the negotiating rounds and at no point was anyone truly forcing the issue and taking control of the negotiations. At the end of the day the signs are somewhat conflicting. Sellers who have a strong product to offer will still find a significant number of interested and qualified buyers. Those buyers will still make offers, but the speed and strength of those offers has been greatly reduced.

Finally, these three properties all had very strong initial open houses. In the case of two of the properties they were introduced to the marketplace on Easter Weekend, had no print advertising driving traffic to the door, and still drew an extremely high number of open house guests. If I were the Boston Globe I would start to worry that sellers are going to stop pushing for their house to be listed in the Sunday print edition, because agents have been saying for years now that the print media does not aid the selling process at all. I would much rather take the significant money spent on Globe advertising and create content-rich websites and e-marketing campaigns. At the end of the day, the sellers usually want to be in the Globe no matter what, so we're there, but this process would be significantly less costly without print media.

They're still selling

Last week I commented on the influx of new property on the market in Brookline. The best news is we haven't seen as much come on this week and we have an incredibly high number of under agreement properties. This week we already see 14 "UAG" condos which is a very nice response to the 21 that were added to the marketplace a week ago. In addition there are 11 properties with price changes and only 9 new listings.

The low number of new listings might be a result of the Easter Holiday weekend, but the high number of under agreements in a week that started with so much financial unrest is an impressive number. Personally, I was involved in a six offer situation on a single property which according to the Boston Globe, shouldn't be happening in this market.

The negative media persists, as we have to assume they will. Median prices are a sign of what happened 1-3 months ago, these numbers are what's happening now.

I am off for Good Friday and Easter, but hope to have more on Monday.

Update on New Condos in Coolidge Corner

Last week I wrote about a new condo development being discussed for Coolidge Corner. This morning the house at the center of this development, 109 Sewall Ave., collapsed in flames which reportedly spread to the buildings next door.

The Best Zip Codes - The Boston Globe

The Best Zip Codes - The Boston Globe

The "Real Estate Issue" of the Sunday Globe Magazine has this great chart(link above) in it today. In total 200 zip codes inside of I-495 are analyzed on growth of median single family home prices, education level of residents, charitable giving, use of public transportation, racial diversity and many other factors. What we see, in the opinion of the Globe, is Brookline zip codes are 2nd, 3rd, and 7th out of 200. Back Bay tops the list with Cambridge(above Harvard Square) and the South End sneaking in there as well.

I will have more on this tomorrow, but this piece ties in very well to a similar article written in the Wall Street Journal at the end of the week which stated that so much of the housing market today changes from zip code to zip code (neighborhood to neighborhood). It is critical to evaluate what aspects of each community would help secure the long term prospects of the money you need to buy into them and make your buying decisions from there.

9 Factors Protecting Brookline from Market Collapse.

Today we had a discussion in the office in which someone commented that "there is no way Brookline can be the only town in America that doesn't 'crash'." Well, first, Brookline is nowhere close to the only town in America that is surviving the real estate "downturn." Second, I asked "what has changed about Brookline that would lead to a crash?"

1) Our schools are still as strong as they ever have been.
2) Longwood Medical Area is still next door and there is another new batch of residents preparing to move up here in the next three months.
3) We are still the absolute closest community to downtown Boston.
4) We still have (for lack of a less-used term) "historically" low interest rates for buyers.

Add to these factors:

5) Children are starting or finishing school every year, leading to lifestyle and housing changes for their parents.
6) Couples are still marrying or divorcing.
7) The biotech, medical and academic communities are not disappearing any time soon.
8) There are very few, if any at all, communities that have performed so strongly in recent years. Also, very few real estate investments have proven so stable as those in Brookline.
9) Almost most importantly, the number of homes "sitting" on the market is the lowest we have seen in a very long time.

All of these factors point to secure strength in the Brookline housing market in 2008. As much as we might expect a downturn or we might be afraid of one, we need to look at which factors could lead to or prevent a turn in the market. Commentary without analysis does not help anyone right now. The analysis shows us we are in a good spot. With the incredible mass-media negativity for the second half of 2007 we should have seen a real estate implosion. If some of the nine factors listed above change then we should look for changes in the market. As far as I can tell, with rates and inventory staying down, the other factors are not changeable in the short term.

Local home sales slide - The Boston Globe

Local home sales slide - Daily Business Update - The Boston Globe

Kimberly Blanton posted this today in the Globe's business section and it's already become one of the most emailed articles of the week. Here is what you absolutely need to know for Brookline.

November 2006 Condo Sales

Median Price: $457,553
Average Days on Market: 107

November 2007 Condo Sales

Median Price: $490,000
Average Days on Market: 79

I have not put single family home sales because they are skewed by the small number of properties sold this time of year. 10-15 homes is not the best tool for comparison when we have three to five times as many condos being sold in a similar period. A few things which cause the numbers in any November to be down from the rest of the year is the type of property that sells better later in the year. Many 3 bedroom+ units are bought by families who don't enjoy moving their children mid-school year. A lot of one bedroom units sell this time of year to renting professionals or the new crop of Medical Area recruits who are moving to Brookline in January. Look for live housing data graphs shortly on my website: www.TheBrooklineConnection.com

I know what you're saying, but what do you mean?

There is so much talk these days about the real estate market, pricing changes and trends, and all things related to our most precious investment. What does it mean? What numbers should we pay attention to and what should we not worry about?

Statement 1: "The real estate market has dropped close to 20% nationally."

Response: There are areas of the country that are being hit very hard right now. Some of the largest losses are in Florida and California.

Statement 2: "The media has story after story about how bad the market is, how can it possibly be good?"

Response: Compared to the 3rd quarter of last year, our total number of condominiums sold increased 15.6%. The median prices increased 3.0%. The average days on market is down two days and the total inventory remaining on the market is down 18.9%. The single family sales numbers are far and away better than the condos. Please contact me if you want the full breakdown.

Comment: So, what does this mean?

Response: Buyers and sellers need to take a good hard look at the numbers. Right now we are in "stand-off" mode. Buyers are going to properties and saying "I'm not going to pay that price because the market is down." It is critical for buyers to take a good look at property simply for how it fits the lifestyle they want and then have their buyer's agent negotiate the proper price for it. Sellers, you need to make sure you are absolutely attuned to the sensitivity of the market right now and take your best shot pricing your property from the start. Long gone are the days of "we'll try this price for a few weeks and if it doesn't sell....." Price your property to sell immediately. The worst thing that can happen is people get into a bidding war over it. Doesn't sound so bad now, does it?

We'll wait to see what numbers October brings us tomorrow, but for now Happy Halloween and take a deep breath. The sky is not falling.

"September sales tank..." except they don't.

Ah, my nemesis Kimberly "Chicken Little" Blanton is at it again. Fear mongering, inflammatory statements that brush the far side of the truth, and simple over generalization about something that cannot and MUST NOT be over-generalized.

On October 9th I started my post by stating I was providing numbers you should see in the Globe but you won't. I then put together a press release that I emailed to various media outlets, including the Globe. Please contact me if you would like a copy of it.

Tucked at the bottom of the business section piece on the market are quotes and numbers indicating that the Greater Boston market is actually UP. Take a look at the numbers, make your own conclusion. Yes, the market in other areas of Massachusetts is not nearly as strong as we have here in Brookline. I would not give you a market analysis of your home using sales stats from Worcester, so why should you be swayed by stats from their market either? The Globe is doing a disservice to the sellers of the Greater Boston area. They are spitting in the face of arguably their single largest revenue source, and they do not take the responsibility they have as a respected news resource seriously enough. If you read Kimberly's piece and are thinking about selling your home you will most likely panic. Please take a deep breath, take a look at Brookline's numbers and you will see that your investment is still as secure as it ever has been.

As a quick post script, tonight you will be able to see me roughly at 7:30 being interviewed by the Brookline Board of Selectmen for appointment to the Zoning Board of Appeals. There has been a lot of controversy surrounding the Board recently, and I hope to be a part of restoring confidence in the process. For more detail tune into BATV Channel 23.

What Commission Do You Charge?

It is amazing how many conversations about real estate start with that question. It baffles me to this day that this is the one field in which people think they can make a decision simply by how much money the professional practitioner will "charge" them. It gets asked other ways, like "what's your fee" and "how much will it cost me" but at the end of the day, it speaks to a backward mentality.

Let's run through an exercise here: You get a big bonus at work this holiday season and you decide you want to buy a fancy new car. Let's say you spend $80,000 on that car. When it comes time for that first service are you going to go from random mechanic to mechanic and ask them what their rate is? You'll most likely take it to someone who you have heard has specific expertise with that model car, and you'll most likely pay a lot more than the random mechanic who would have done who-knows-what to your car.

An even better example is picking a place to eat dinner. Do you open the yellow pages, start at the A's and call asking "what's the price of food?" First, there are steaks and lobster which will be a whole lot more expensive than burgers and fish sticks. There will also be places which will give you $7 steak and I seriously doubt you would feel comfortable eating it. The simple "what's the price of food" question just makes NO sense. If you feel like a steak, you're going to the Capital Grille or Abe & Louie's.

So, what commission do I charge? It's impossible to know. I need to see what type of house or condo you have, and then we need to have a serious discussion about your pricing before we can determine how in-depth we need to get with your marketing campaign. From there, we build out a marketing calendar and we decide which types of floor plans and virtual tours you will need.

The one important thing to look at is the agent representing your sale does not get 5-6% of the sale of your house. All agents should be cooperating with buyer's agents. This usually takes half of the commission amount. Next, most agents split their commissions with their offices who pay for Globe and Boston Homes ads, certain Open House materials and other incidental costs. I will say, on average, I am looking at maybe 1.5% of the overall sale price of your house before I even start doing my own personal marketing efforts for your house (floor plans, fliers, post cards, catered broker tours, etc...). Remember, all of these things are paid up front whether your home sells or not. So yes, maybe there is someone out there willing to give you a "rebate" or "charge" you a lower commission, but I assure you the Globe isn't charging them less than me for advertising and the floor plans I pay for aren't offered to them for less money either. By hiring that agent for less money, I will ask you.....how much will that cost you?

Turnaround? Rebound?

For today, and I think today alone, I'm going to give credit to Kimberly Blanton at The Boston Globe for her piece in the Globe Real Estate Blog. Add this new news to the stats yesterday from MAR and The Warren Group and you'll see more and more cautiously optimistic news. Yes, the housing market nationally is down. There are segments of the market which are way down. However, Boston is still growing in terms of prices and other key market waypoints.

Let's face it, the once thing Greater Boston always has going for it is life. How many thousands of students and young professionals come and go each year? How many new doctors arrive for their residencies and how many new biotech jobs are created each year? These people all need a place to live. Add that to the normal cycle of life (birth, death, new jobs, kids growing up, etc...) which causes people to move and you'll see all of the key elements of a perpetually strong real estate market.

People in the market today have heard all of the news, they've been scared by all of the bad reports and they're taking a look at their life priorities. Those who truly need to buy or sell are motivated by that need and make their decisions accordingly. This is why our market is so healthy today. A renter who shouldn't really buy yet is holding off until they actually have enough money to buy. A seller who is changing their quality of life lists their property to move, not to make gobs and gobs of money. This is all good and this will keep us all strong for a long time.

Remember, extreme growth feels really really good, but most times it's not sustainable, and this is what we saw happen recently. We're back to "normal" growth now, and we're in a good spot.

The dangers of The Globe Real Estate section

Every week I see it. The top searches box in the upper right corner of The Globe's homepage. "Open Houses" is always at or very near the top. It's great in theory that you can just go to your local paper, enter your search criteria and not have to worry about being contacted by an agent. I mean, it makes perfect sense. I want to by a home, I go to an advertising section in a paper. I want to buy food, I can find that in the Globe too, same with clothes, or stocks, or furniture. OF COURSE NOT!

Yes, there are a lot of real estate agents out there, and sometimes contacting them will cause one of them to call you back. It's amazing that consumers like to complain about how little agents do for their money, but these same consumers go to great lengths to avoid all of the efforts those very same agents are doing.

Here's the scenario: I am a listing agent for "Property A." Before signing the listing contract I went out and did a thorough market analysis sifting through over 1200 homes which have recently sold. I've compared square footages, amenities, finishes, styles and proximity to the things we all want to be close to. I've now presented my case to the sellers. At that moment, I am the most knowledgeable person about that property and its place in the market. What gets overlooked is I can also tell you about the 5-10 closest "competitors" to this listing as I've already analyzed their square footages, amenities, etc...

Now, Mr. & Mrs. Buyer, you give me a phone call, and I determine with you that you're qualified to buy "Property A" and it seems like it might be a good fit. We arrange a meeting to go see Property A but we also take a look at the three most similar alternatives currently available. There are over 400 homes on the market, how much time did you, the buyers, have to spend researching and sifting through to come up with those alternatives? None. It's my job.

Here's the other danger with searching the Globe. It's an advertising section, and therefore only has the listings which each company has chosen to put in on that specific week. There are many properties which never have open houses (they don't really lead to property sales) and the Globe doesn't let you see that inventory.

Call an agent. They are working hard every day to preview the market, determine what the best values are, and weed out the ones that don't fit.

Major Controversy

Both the Sunday Globe and the Brookline TAB today had major articles about the recent purchase of the 12 Catlin Road property on Fisher Hill. Now, if you want the overview of the story, the links cover it. Why is this such an interesting story? This is not a social or political blog, so I'll let everyone make their own decisions on this.

Where this story gets interesting is with the application or more correctly the protection of the Dover Amendment. In certain cases communities have exempted businesses and organizations from "Dover" protection. Harvard is no longer protected in Cambridge, for example, because of their size and ability to purchase land necessary for their uses.

Would it be possible for Brookline to step in here? First, I find it very unlikely because we're dealing with a house of worship and not a business entity or educational monster. I believe the Mormon Church is smart enough and large enough that they can get plans to the town and the community that make them realize that this is not a huge disruption.

Now, I happen to have a tiny bit of inside insight here. I did a listing presentation at this property a while ago. My indication is this is a very proud neighborhood filled with people very protective of their privacy and their exclusivity. One thing they are forgetting is there's a college in the middle of their neighborhood too. Now, the college is not on Catlin road, but it's in the middle of Fisher Hill, and the traffic implications of that institution are a lot greater than this property which is as far on the outskirts of the neighborhood as possible.

Again, my guess is plans will be submitted, the neighborhood activists will speak their piece, and the project will be settled amicably between the neighbors and the Church. Let's face it, we live in Brookline, one of the most unique communities around. It would be very unlike us to start excluding a religious organization.

In closing, Happy New Year to all of those celebrating today, and as always please keep the Breast Cancer Research Fund in mind.