Critical Change to Mortgage Regulations for Buyers

One thing that nobody on the national level has discussed yet (as far as I can find) is the critical change in qualification requirements from Fannie Mae and Freddie Mac on interest rates for mortgages. Officially effective on March 1st, but in practice in most cases already, banks are going to begin providing interest rates based on customers' FICO credit scores. Our in-house mortgage representatives from William Raveis provided us with a sample breakdown this morning which I will provide below:

The score categories are:

FICO below 620
620-639 FICO
640-659 FICO
660-679 FICO

The way this translates on a sample 6.125% rate is:

FICO below 620 - sample rate would change to 6.625% with one point being purchased
620-639 FICO - sample rate would change to 6.625% with 3/4 of a point being purchased
640-659 FICO - sample rate would change to 6.5% with 1/2 of a point being purchased
660-679 FICO - sample rate would change to 6.5% without any points being purchased
680 FICO and up - sample rate would apply

This is all pretty complex for a first-time home buyer to understand when they are not being advised by a strong mortgage professional. We will also see additional changes in the requirements for condominium association reviews by lenders. I will discuss those tomorrow.

Immediate Access to Local Housing Data

I have added a link to the menu on the left that will provide everyone with access to constantly updated graphs and charts of local housing statistics for any town in Connecticut or Massachusetts. There are so many factors which go into analyzing every market, and these charts attempt to cover the most powerful of them. Either way, with all of the reports swirling around about the market, I ask all Brookline residents and home buyers to look at what causes people to buy or sell. Kids are still moving off to college or getting married and leaving home for good. People are still getting new jobs and relocating. Children are still being born. Therefore, the market will continue to turn, and we know that we live in one of the most sought-after communities around. With the small amount of available housing supply out there, we know that the sellers who need to move will find less competition for buyers and the buyers out there will be drawn to the new housing stock hitting the market over the next few weeks. These elements add up to a good formula for success. None of us really knows definitively what will happen, but very few things make as much sense as supply and demand. Today we see strong demand without much supply. I like that formula.

2006 vs. 2007 Brookline Single Family Sales Report

The second part of yesterday's report is what single-family homes have done in Brookline. If you remember back to September, single family homes were doing significantly better this year than last. So, here we go:

In 2006:

The median sale price of a single-family home was: $1,000,000

The average sale price of a single-family home was: $1,288,169

159 homes sold in an average of 129 days on market.


In 2007:

The median sale price of a single-family home was: $1,100,000

The average sale price of a single-family home was: $1,432,278

187 homes sold in an average of 139 days on market.


So, at the completion of the year we see we're doing well. More single-family homes were sold in 2007, more condominiums were sold in 2007. The median price for single family homes went up. The median price for condominiums went up. The days on market stayed reasonable, and Brookline has escaped the firestorm. Do not expect to hear these numbers from The Globe because there are areas in Massachusetts where home sellers are having a considerably tougher go of it.

If you are thinking of selling in 2008 it is critical that you are armed with this information to help support your pricing goals. It is even more imperative that your agent can quote these numbers. Any agent in Brookline who does not have a complete understanding of where our market sits on a month to month or year to year basis is doing a disservice to their customers and clients. Do not trick yourself into thinking it will be easy to sell in 2008. It will take more work and you will have to be more precise and persistent. If you have the right strategies behind you I know you will find success.

2006 vs. 2007 Brookline Condo Sales Report

With all of the media hype in the second half of 2007 I would expect to see the bottom fall out of the Brookline real estate market. Regular readers here already know that hasn't happened, but let's take a look at what has happened.

In 2006:

The median sale price of a condominium was: $453,000

The average sale price of a condominium was: $508,373

625 Condos sold in an average of 85 days on market.

In 2007:

The median sale price of a condominium was: $453,339

The average sale price of a condominium was: $502,144

660 Condos sold in an average of 91 days on market.

The only "downturn" we see is the slight dip in the average sale price. I put both average and median in because it gives us a more firm overview on the whole market. Two major reasons for the change in average sale prices are more sub-$200,000 condos sold in '07 (5 vs 4) and the highest priced condo sold in '06 was $2.125 million as opposed to $1.9 million in '07. It's because of these swings that a median price analysis is sometimes more indicative of true trends.

All in all we can say in the condo market, more property sold for pretty much the same prices as last year in about the same amount of time on the market. Can someone tell me where the "crash" is?

Lots and Lots of News!

Welcome to the New Year! I hope everybody had a safe and enjoyable Holiday. There will be lots of news here in the next few days. I will start with a final analysis of the market numbers from 2007. From there we will start to discuss the many major mortgage industry changes that will impact Brookline buyers and sellers in 2008. Also, we will start to see an incredible number of properties come on the market over the next 30 days. Stay tuned!