A National Mortgage Broker Chimes in on Boston
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The following is from Dave Donhoff, a national mortgage banker/broker:
Hi Mish,
Regarding: The The party is over in Boston
No buyers? Fancy that. On a $70,000 price cut no less. Let's see, is that a 15% price reduction? Yep. Does that include a 6% fee to the real estate agent/broker? Nope.
EndSnip...
Anecdotally I'm seeing increased inquiries in foreclosure bailouts and distressed requests for cashout refis (to fund reserves because payments can't be met... which, of course, we do not do) from Greater Boston, and the California Bay Area.
FURTHER, nationwide the rental levels are breaking from stagnant to a creep to a LEAP in some markets...
If there was EVER a time to get buttoned up as a real estate investor... the markets' about go go on deep-discount sale. Probably "once in a lifetime" buying opportunities will begin opening up to the diligent who are cash & credit strong.
Cheers,
Dave Donhoff
National Mortgage Banker/Broker
Instride on the Motley FOOL replied with:
I am not a realtor and do not play one on the internet. I am a podiatrist who happens to treat a realtor every now and then in my office. The following is scuttlebutt and fungusamentals obtained while extracting fungus while trying not to go mental.
In Weymouth, MA a second generation local family run realtor says that commissions dried up by the end of last year. There were 81 houses listed for sale in town, last year. Sales were very very good. This year, there are 244 listings but sales are dead. Nothing is moving. Three other realtors covering areas Boston south to the Cape and Islands confirm that sales have "dropped off the table this years." To quote one of them, "the glory days of 6 figure salaries are gone." Another said, "Condos are what is moving best right now, but it does not even come close to making up for the lost home sales."
I am also starting to see a phenomenon I have not seen before: for rent signs out in front of homes with for sale signs.
I also saw on the ABC News that a contractor is resorting to E-bay to sell a house he built in Ashland, MA after it did not sell for 3.3 million. He is reducing the 5 bedroom house on 2.6 acres to a "bargain" 2.8 million. I bought a 4 bedroom house on 10.2 acres ubutting a national park in Nova Scotia for 27,000 US dollars just 3 years ago. Now there is value for you.
It seems as if we have similar observations as to the Boston area market that have been arrived at in an independent fashion.
Instride
A proud member of the Boston real-Tea party
Mish reply:
Thanks Dave and Instride.
We need to stress patience on that buy side, and that can vary widely market to market. This housing bubble (and yes it is a national bubble) can crash now or it can take years to play out. I suspect local conditions will vary widely. But I sure agree with you that the best opportunities will be for "the diligent who are cash and credit strong". I would also add opportunities will be for those that understand value and local conditions and how fast they can can turn, as well as how extreme both of them can get. We have seen the extremes on the high side. It sure remains to be seen what extremes on the low side will look like. Condos in bubble areas are particularly likely to be smashed.
Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com/
