Archive for July, 2009
July 29, 2009
Thanks to first-time home buyers and newlyweds Tom and Jennifer for leaving us a five star Yelp review! We wanted to learn more about their experience buying a home with us.
Tom & Jennifer’s Story
We weren’t planning on becoming homeowners so soon after we started searching in March 2009. Our wedding was set for late June and we hoped to buy a home after our honeymoon–closing before our lease ends in August. But, the right home came along a bit sooner than we expected. We ended up signing the purchase and sale agreement two days before our wedding, and closed the week after our honeymoon.
We heard about Redfin through a co-worker who had used the site to search for homes. We loved the map based search where we could drill down to figure out how close homes are to the train station. The site also made it easy for us to keep track of new listings coming on the market. After checking out a few open houses on our own, we toured around 8 – 10 homes with a couple of Redfin field agents. The Boston market is hot and we knew we needed to act quickly when a home came on the market priced well within our range.
Explain Your Reasons For Offering Below List Price
The home needed a new roof, along with some other repairs, and we knew the sellers wouldn’t pay for them. We were ready to foot the bill ourselves, but only if we could shave off $10,000 from the list price. So, we discussed pricing with our Redfin Lead Agent, Adam Welling, and decided to come in $20,000 below, expecting that the sellers would counter at $10,000 below list price. Well, the seller turned out to be a commercial real estate listing agent. Residential real estate is lot different in terms of negotiating a discount off list price, and the sellers came right back with list since that’s the norm in commercial real estate. Adam did a great job of explaining our reasoning for the lower price, and the sellers ended up right where we wanted at $10,000 below.
Tom and Jennifer's New Home
Overall, we loved Redfin’s service and Adam communicated with us every step of the way. It’s probably not a great idea to get married and buy a house at the same time, but for us it turned out well. We would recommend Adam and the Redfin team to anyone who is looking to purchase a home.
July 28, 2009
It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). For the full source data behind this post, plus seasonally adjusted and tiered price data, hit the S&P/Case-Shiller website. For an explanation of how the Case-Shiller data is calculated, check out their methodology pdf. Also remember that the data released on the last Tuesday of a given month is for the period two months prior (i.e. – May data is released in July).
Before we dig into the data, I’d like to make a brief mention of an excellent post over at the economics website Calculated Risk: A Few Comments on Housing Reports. Quoting from his post:
…the Case-Shiller report today really bothered me. To be more accurate, the reporting on the Case-Shiller report bothers me. As I mentioned earlier today, there is a strong seasonal component to house prices, and although the seasonally adjusted Case-Shiller index was down (Case-Shiller was reported as up by the media) – I don’t think the seasonal factor accurately captures the recent swings in the NSA data.
Keep in mind that the Case-Shiller data that most of the media (including this blog) are reporting on is usually the raw index data. As CR mentioned, the housing market is a very seasonal beast, so it’s difficult to draw any meaningful conclusions from month-to-month changes, unless they are far outside the norm for that time of year. This is why we consistently report the year-to-year change in our summary.
Now that we’ve got that out of the way, here are the basic Case-Shiller stats for the Boston area* as of May:
May 2009
Month to Month: Up 1.6% (raw)
Month to Month Up 0.3% (seasonally adjusted)
Year to Year: Down 7.2%
Change from Peak: Down 18.5% in 44 months
The following chart shows the Boston area HPI scaled such that the September 2005 peak is 100% on the y-axis. Data on the x-axis is scaled to display the last time (pre-peak) the Boston area HPI was at or lower than it was in the latest data (February 2002).
(All of the charts below are based on the non-seasonally-adjusted Case-Shiller HPI data.)
Boston’s spring uptick this year is definitely coming on stronger than it has for the previous three years during this downturn. It will be interesting to see whether this continues over the next few months.
Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves, so you can compare Boston’s performance to other areas across the country:
And here’s our final chart, in which we line up the peak Case-Shiller HPI value for each of Redfin’s markets, so we can see how long each market has been declining, and how much it has dropped from the peak.
It’s also worth keeping in mind that in addition to being from a usually-strong time of year, these numbers represent home sales that closed during the frenzy of interest rates in the fours and the debut of the $8,000 first-time homebuyer tax credit. In my opinion, we won’t really know if home price declines are mostly over until we see the data from October / November. And that advice is worth exactly what you paid for it ;^)
*[Case-Shiller defines Boston as the entire Boston-Cambridge-Quincy, MA-NH Metropolitan Statistical Area, which includes all or part of the following counties: Essex MA, Middlesex MA, Norfolk MA, Plymouth MA, Suffolk MA, Rockingham NH, and Strafford NH.]
July 24, 2009
Let’s check in on our stats once again and find out where buyers are currently getting the biggest discounts off asking price. If you are a potential buyer, this will help you to know which neighborhoods may be softer in terms of sale price discounts off list price, and help you know where to look for potential bargains.
In the charts below, we have taken all sales data from last month in the Boston area and sorted it by zip code. We calculated the overall difference between the sale price and the list price. Note that this reflects the final list price, after all price drops in the listing. Any areas with fewer than ten sales are excluded from the top and bottom ten rankings, but interested readers may download the full data summary in Excel format (xls).
Here are the top ten areas with the largest overall discount:
The overall discount rate for the Boston area dipped slightly from May to June, dropping to 4.4% from 4.5%. While the overall rate fell, the average discount in the top ten zip codes grew, which would seem to indicate that there is a growing disparity in the discount rate between different neighborhoods.
Here are the ten areas with the smallest discounts:
Of the 217 areas we ranked, only 01610 (South Worcester) came in with an average sale price above the average list price.
Is the area you’re shopping not on either the top 10 or bottom 10? No problem, just download the full rankings in Excel format and hit the “FullSummary” sheet.
Of the 5,762 sales we tracked in the 1-month period, 494 homes (9%) sold for 10% or more off the asking price, while 157 homes sold for 5% or more above the asking price.
July 21, 2009
The Boston real estate market keeps getting more competitive: in June, almost half of the homes our clients bid on had multiple offers. Our Boston agents presented 68 offers to listing agents and 31 of those, or 46%, were on homes with at least one other offer, up from 43% in May.
“With not a lot of good homes for sale right now, many buyers have seen everything that’s on the market and they’re dialed-in to what’s available,” says Sean Valiton, one of our all-star agents in Boston. “When a nice home with a good price comes on the market, informed buyers are pouncing.”
Recently, one of Sean’s clients lost out on two homes in Belmont, before closing on one. In each case, there were at least four competitive offers soon after the home came on the market. Sean made sure his client kept a steady a head and didn’t get wrapped up in the emotion of multiple bids. In the end, his client got the home he wanted at a good price.
Where are you seeing listings with multiple offers?
July 21, 2009
It took 10 days longer for our Boston clients to close on their homes in June than it did in May. In March, closing took only 45 days. The good news for our clients is that even though it may take a while to close, only two of our Boston clients’ deals have failed to get financing since February.
The main reason closing is taking longer is because on May 1st, the Federal Housing Finance Agency’s Home Valuation Code of Conduct (HVCC) took effect. The HVCC is designed to make home appraisals more reliable by restricting the interaction between mortgage lenders appraisers. Since May 1st, lenders can’t deal directly with appraisers. Instead, lenders schedule appraisals through third-party management companies. This adds a buffer between the lender and appraiser, but it also adds time to the process. You can get all the details in the official statement from the Federal Housing Finance Agency (25K PDF).
“Be prepared for possibility of a delayed closing. With the new guidelines, it’s taking up to 14 days to get homes appraised,” says Hannah Driscoll, one of our Boston agents.
Hannah has recently begun advising her clients to order their appraisals as soon as they know they’re going to move forward on the home.
“Closing on time is priceless,” says Hannah. “So don’t wait until you sign the purchase and sale agreement to have the home appraised. Be proactive and order the appraisal right after the inspection if everything looks good. Paying a few hundred dollars upfront could save you a few thousand dollars and a lot of headaches if you have to extend you close date.”
Let us know if your home purchase has been held up by the appraisal?
July 20, 2009
Our Boston agents had a great month in June! Sean Valiton and Hannah Driscoll rank first and second in Eastern Massachusetts and all three of our Boston agents rank in the top 1.3% of buyer’s agents with at least one deal in June.
Redfin clients work with some of the most active and successful agents in the Greater Boston area. Our agents are experts in the in what’s happening in Boston real estate right now and they know what it takes to help our clients buy the homes they want.
We pulled these numbers from MLSPIN, the database for real estate transactions and listings for Massachusetts, and ranked agents who represented home-buyers of condominiums, single- and multi-family properties in June based first on number of deals, then by total dollar amount.
Our Clients Love Our Service
We are so proud of our Boston team. During our busiest time of the year, our clients are thrilled with Redfin’s service. We survey every client and track every transaction. For the surveys we received in June from our Boston clients:
- 44 clients responded to our customer-satisfaction survey and posted a review online, up from 18 in May.
- 43 of those clients, or 98%, would recommend Redfin to a friend, down from 100% May.
In these surveys, Redfin asks customers to rate the likelihood that they would recommend Redfin to a friend on a 0-to-10 scale. Customers who rated 6 or higher count as people who would recommend Redfin to a friend.
Check out Jennifer B.’s five-star review on Yelp about her experience of buying a home with Adam.
For more numbers, download the spreadsheet with the data on what happened at Redfin in June.
