Feds Bail Out, Install New Course of Shingles to Prevent Trickle-Down

A recent spin around the blog-o-sphere landed me this unpleasant fact, courtesy of Stacy Meyers at Boston.com: apparently 684,000 people over 50 are in trouble with their mortgage, and over 50,000 already lost their homes. Now, those seniors and near-seniors paid taxes their entire lives, they are still paying taxes, and they will even pay some taxes after they shuffled off their mortal coils — I think it’s safe to say that they’re paying for the recent bailout of Fannie Mae and Freddie Mac just like the rest of us.

So what are our new government-owned mortgage behemoths going to do for those taxpayers?

Is it bubkiss or budkiss? Anyway, I know how to spell zilch.

It’s lucky Social Security is in such good shape after all of the hoopla over that issue in the last — is it 2 or 3 presidential elections? What happened with that again?

According to Toni Straka at The Prudent Investor, the bailout doubled the public debt of this country. But now we — the taxpayers — own all of those mortgages, and so the power to change the terms of the bad loans that are at the heart of this whole mess is in our hands, right? This is going to be good for the average citizen in the long run, right? I mean, we’re going to see some real benefit from this weird and scary (and probably necessary — Greenspan thinks so, anyway) corporate welfare — right? Right? Um…guys?

We should have had regulation of the mortgage mammoths just as Greenspan warned in 2004, but now we have control. So what are we going to do?

By “we” I guess I’m talking about the assorted clowns, goons, and evil, greedy X-Files types who got us into this mess, and that keeps me up at night.

But let’s assume “we” really want to put the real estate market — and the country — back on the rails. What should we expect to get out of this?

The answer is simple: we need to stop the foreclosure process and provide debt relief to the people who need it most. We desperately need to keep that inventory off the market, and we need to keep those homeowners in the market. Demand for houses isn’t really low — it’s just stupid to think people don’t want to own their own homes — but the supply of qualified buyers is being gutted in 6 different ways by the worst fiscal mismanagement most of us have seen in our lifetimes.

Now, you hold your breath until January…or January 2013 if we elect more-of-the-same….

Here are a few things we should see right @$#%*&! now:

1. Forgiveness of any and all punitive debt attached to first mortgages. By “punitive debt” I mean default interest rates, late charges, and any other little treats the credit and collections folks have written into these ailing notes. It isn’t real money, and now there are no investors to crow and peddle influence against doing the right thing for everyone. So do it — give these people a reasonable chance to keep their homes, and welcome them back into the fold.
2. Curb the collections industry. Nobody likes those guys anyway. We need legislation that defines a lot of the industry’s practices for what they are: harassment and fraud.
3. Re-reform bankruptcy laws. The bankruptcy “reform” laws signed by president Bush early in his tenure look pretty sinister in retrospect. I don’t pretend to know all of the ins and outs, but we need to make it easier for people to shed bad debt and get a second start — we depend on the ability of individual consumers to recover, and writing off non-mortgage debt is going to hurt — holy cow! — the very same financial institutions that created this crisis in the first place. Call it a free-market simulation….
4. Refinance ailing mortgages. If you offer people another poke in the eye, they’ll just lose all hope and resign themselves to losing their homes. But if you offer to refinance their ARM (or whatever) at a decent rate and payment — even if it’s over 40 years — you create incentive for them to keep their homes.
5. Put a leash on the credit reporting bureaus. Say Mr. and Mrs. Gunderson are 2 months behind on their mortgage, and desperately trying to refinance an ARM. The lender is going to use their tanking credit score to raise the interest rate on the new loan — effectively offering them another deal with the devil. Again, if there’s no incentive to avoiding foreclosure, people are going to let it happen.

And You Were Worried ABout Risk In Real Estate? (Arrrrrr…)

Boston Sweet Digs Home

And You Were Worried About Risk In Real Estate? (Arrrrrrrr….)

First, happy Talk Like a Pirate Day.  Uh…maties.

It was only last weekend that I told a friend of mine about my ill-fated attempt to buy an investment property/vacation camp in the Adirondacks, and she replied, “Just keep your money in investments — then you’ll have more when the next one comes along.”  She’s right about the “next one,” but if I were in a position to do it, I would move every cent I had into real estate. My retirement portfolio lost 12.4% this year, and we’ll see what it looks like in a week.

I hate the stock market — I hate the very idea of it.  The price of a stock has nothing — nothing! — whatsoever to do with the actual value of a company.  How many stock market crashes can you have during an 8-year period before you admit you’re just gambling, and that the house cheats?

Funny thing, though — any house on the market is still worth exactly 1 place to live and 1 place to keep your junk. If it’s a nice house, a house you like, maybe a place with the intangible qualities of both “my” and “home” attached to it, then it is worth significantly more.

Which is why Real Estate is where everyone ran to after 2001-2002.  People need to put money somewhere, and Real Estate was the place to do it — this is another factor that fed the mythic bubble, changing the faces of entire rural communities in Upstate New York (for instance), encouraging the gamblers to look north of Wall Street for a place to sit and safely tremble before the TV screen.  Now, people who could buy are wary of a market that, well, has to bottom out somewhere.  And, yeah, we’re all kind of worried about how bad it can get. But real estate is REAL — it isn’t some crazy made-up social contract like the stock market or currency.  It isn’t a piggy bank — equity stripping got a lot of people into the mess they’re in — but you can touch it and stand on it and use it while you bet that there will be more people every year who need places to live.

So, for those of you holding a bunch of worthless paper (I’m not even going to look at my 403b statements until after the election — I worked really hard for that money….), or feeling good about not owning any stock (even owning American dollars is that much better right now) — consider going to some open houses this weekend.  Kick some metaphorical tires, and think about what an investment does for you, vs. what a home — or a second home — can do for you.

9 Beach Street
Beverly, MA 01915
Beds: 3/Baths: 2.5
SQ.FT.: 2080
$650,000
Open House: Sunday, September 21, 2008 1:00 PM – 3:00 PM

94 McKay Street
Beverly, MA 01915 
Beds:3 /Baths: 1
SQ.FT.:1590
$288,000
Open House: Sunday, September 21, 2008 12:00 PM – 2:00 PM

7 Fayette Street Address
Beverly, MA 01915
Beds: 4/Baths: 1
SQ.FT.: 2325
$329,000
Open House: Sunday, September 21, 2008 12:00 PM – 2:00 PM

August Sales In Salem

Boston Sweet Digs Home

August Sales In Salem

If only the pun were true; August sales were a little wan compared to July.  Of course, the dates on these reflect the date the house was closed on, not the date the purchase & sale was signed.  Buying a home generally takes at least 6 weeks in my experience, so these houses sold in midsummer.

If these 3 listings say anything, it’s that new buyers are coming to the market to meet the falling prices, and that’s a good sign for the long term.

If you are looking for a house or condo, it’s a good idea to spend some time poking around recent sales — just check the box under Advanced Search and your neighborhood searches will include past sales.  This is the real, raw data that any market estimate is based on, and it’s easy to do a drive-by and see the houses that sold for whatever they sold for….  What I man is, if it seems like a house sold for peanuts, don’t judge the whole neghborhood; you could go over there and see that the new owner is rehabbing the place, and that it was priced accordingly.  Etc.

Now eat your data.

3 Horton Court
Salem, MA 01970
Beds: 3/Baths: 1
SQ.FT.:806
$117,900

146 North Street, #1
Salem, MA 01970
Beds: 1/Baths: 1
SQ.FT.:769
$ 169,000

25 Liberty Hill, #3
Salem, MA 01970
Beds: 2/Baths:1
SQ.FT.:  800
$115,000
A Tour Of Beverly In 3 Listings

Boston Sweet Digs Home

A Tour Of Beverly In 3 Listings

My adopted homeland is a strange and wonderful place, where the working class neighborhoods of old lap against the pilings of summer manses, where fishermen and merchant marines share a zip code with the progeny of captains of industries long crumbled in the dust of time. (No extra charge for the melodrama OR the purple prose — now that’s a deal and a half.)

These three listings struck me as characteristic of their neighborhoods, if I spare you a look at the $7 million estates in Beverly Farms. The Farms seems to enjoy some privilege in this town, which I find inherently offensive, but it’s there, nevertheless — they have a public-private fireworks show on the 4th of July, for instance, and a house in the farms worth $7 million assesses for less than half its value while our homes assess for close to 100%.

First, there’s working-class Ryal Side, and a real peach of a house with beautiful views:

87 Kernwood Avenue
Beverly, MA 10195
Beds: 3/Baths:2
SQ.FT.: 1796
$345,000

Then, Montserrat, which bears the same name as the little art college in our town. It has its own train depot 1 stop north of the main one downtown, and any house in the neighborhood is within an easy walk of the Montserrat stop and a brisk-but-not-bad walk from the Depot. Montserrat is pretty, with older historic homes and mostly-nice 20th century architecture, and really convenient — if the bubble hadn’t burst, this area would have taken off next. If you want a commuter’s bargain in an idyllic setting, this could be your new ‘hood.

17 1/2 Pierce Street Address #2
Beverly, MA 01915
Beds: 3/Baths: 1.5
SQ.FT.: 1465
$279,000

Finally, The Farms. It’s pretty up there, and the lots are big, and except for jerks who built fences so the Proles can’t see their ocean views (you know which condo association you are!) it’s a swell place to live. There’s a fruit shop called the Fruitful Basket with amazing bread, cheese, and hand-picked produce that’s worth the premium they charge. The farms has its own natural foods store, wine and spirits shop, and a new Tapas restaurant that I haven’t tried yet.

99 Preston Place
Beverly, MA 10195
Beds: 4/Baths: 3.5
SQ.FT.: 3571
$849,500

It’s What You’re Near

Boston Sweet Digs Home

It’s What You’re Near

One of the greatest things about living up here is the Marblehead Farmer’s Market.

Marblehead is an upscale New England town East of Salem; you can ride there easily from Beverly, partly on the road and partly on bike trails. It’s known for its beautiful rocky coastline, its overlooks, and its narrow streets crammed with historical houses. It looks like the cover of an issue of Yankee magazine, or the latest issue of Land’s End.

We don’t generally go to Marblehead for meals; we have a lot of favorite places near us, either in Beverly or just across the bridge. And, we get down to the hub at least once a week; our friends’ worries that we were heading out to the fronteir, never to be heard from again, were paranoid exaggerations.

But the Marblehead Farmer’s Market combines ethical eating and support for regional businesses with products good enough to attract a dedicated gourmet.

Where else are you going to get Farmstead Bleu goat cheese (the cheese is blue; the goat is a regular goat) from Crystal Brook ? Or, try the West River Creamery’s Cambridge, made with raw milk, or the Firehouse Jack — the jack is creamy and flavorful enough to stand up to the hot peppers, not the wax you get at Big Brother Grocery. Look for her cooler — if it’s on the table, it may contain lamb, red wine, and feta sausages that will blow your mind — hands down the best artisan sausage this German-American boy has ever tasted. The maple sausage is really good, too.

Other notable are the bakers and the Zaika Indian food table — buttery, buttery goodness. Get fresh pea tendrils, baby bok choy, daikon, and purslanes at one table, Fairytale eggplant at another.

It’s at the Marblehead Veteran’s School from 9-noon until October 25th, and this is harvest season. If you’re looking for an excuse to come up and check us out, you can get everything you need for a serious beechside picnic at the Farmer’s Market.

Ideal Commuter Digs In Salem: Walking Distance to the T for $66,000+

Boston Sweet Digs Home

Ideal Commuter Digs in Salem: Walking Distance to The T for $66,000+

Yes — there’s a fixer-upper condo a few blocks from the Commuter Rail, which is faster and runs more regularly than any C-rail in the greater Boston area, for $66,000.  This is a very varied part of town — luxury new construction on one block, nice old row homes on another, and some places that look like…well, you didn’t know they could stack it that high….

Going Northeast along the rail tracks, the closer you are to the station the less likely you are to have to deal with a big concrete privacy wall between you and the Bridge Street Bypass, though this only really affects houses at the ends of the blocks. To offset any potential loss of property value caused by the long (long, long) awaited bypass, the city installed a really nice bike/walk path alongside the road, terminating at the terminal, making any street along this corridor a pleasant walk to the train.  And the bypass seems to be working — traffic concentrates near the rail station and the business end of Washington Street, and away from the houses.

Of course, once that the bypass is finished, they’re going to tear up Bridge Street.  It’s going to be a bit of a hassle on these streets, but when they’re done, Bridge Street will look a lot like the historic areas around the wharf.  The revaluation of this once-rehab region began long ago, but it may be the most dependable investment area in all of Salem now that the construction is finished and people can see what they’re getting.

North Salem is very accessible from here, too, and you can easily walk to the Olde Spot for chocolate stout and the best chocolate cake in the universe.

Check these out, and play with the map zoom.

156-B Bridge Street
Salem, MA 01970
Beds: 3/Baths:2
SQ.FT.: 1492
$279,900

18 Williams Street Address, #1
Salem, MA 01970 
Beds: 2/Baths:2
SQ.FT.:1,000
$ 249,000

15 Lynde Street Address, #31
Salem, MA 01970
Beds: 1/Baths: 1
SQ.FT.:518
$ 66,405

The Deed To The Brooklyn Bridge

Boston Sweet Digs Home

The Deed To The Brooklyn Bridge

There’s nothing like ignoring your own advice.

About a month ago I found a little cabin in the Adirondacks listed FSBO on Craigslist, and I met the owner and had a home inspector come out to look at it.  It was a nice piece of land, and the best looking hole in the ground you’ve ever seen — great septic system, basement, foundation, plumbing, electrical, you name it.  It needed a roof and siding, some replacement windows, and some chimney pointing.  I decided I’d do a gambrel roof and add 500 square feet and a bedroom with a half bath in the process.

You might remember when both Pam Reynolds and I cautioned our readers about FSBO properties, and about the other world owners who eschew the services of licensed professionals often inhabit.  But this was too great to turn down.  According to Zillow and my contractor, this place was going to make me enough money in 10 years to pay off my student loans — and that was a conservative estimate.  And who wants to add commissions to the cost of a rock-bottom property?  That’s window money, siding money, bathroom-renovation money.

When you make an offer with real estate agents, you sign a standard contract and put down some hand money.  Not brain surgery, right?  This guy was even comfortable with owner financing the place, as it wasn’t in any shape to be mortgaged by a bank — not yet anyway.

The first contract I got from the owner’s country lawyer a) made no provision for the hand money he nevertheless expected me to send (essentially I was supposed to send $500 to a guy I met on the internet, with no contract to fall back on if he was a cheat or a flake), and b) contained a clause saying that the entire amount of the mortgage would become due upon the seller’s death.

The seller was 83 years old.

So, basically, I could have put a lot of time and money into the property, and if I didn’t get the note paid off before he hopped his last train, his son would be able to foreclose on the dumb city boy from Massachusetts.  But I trusted this guy, so I blamed his  incompetent lawyer (the guy didn’t listen very well,  and didn’t use email), and hired my own to sort it out.

Apparently that was unfriendly of me.

We went back and forth for a while — my lawyer proposed addenda to the contract, like a clause that said that if the place burned down, the seller couldn’t pocket the insurance and hold me to the contract.  His lawyer told my lawyer his addenda were unnecessary and refused to add them, and then told me that it is customary for the buyer to pay to have the note prepared.  That’s another $500, on top of the sizable down I had raked together, and it sounded like I was getting taken for a ride.  That’s like applying for a credit card and drawing up the agreement yourself.  It’s nuts, and calling it “standard practice” was a lie.

So, on Sunday, I got an email (from the 83-year-old, not the incompetent  lawyer) saying I was wasting his time and money on legal bills.  I faxed him the erroneous contracts, and he sent me another email titled “No Deal” — he didn’t want to sell it after all.

Then he re-listed it on Craigslist, leaving me to wonder if I’m the first of many to blow a few hundred bucks on this mirage, or one in an already long line of suckers.

The $400 I paid to my lawyer was hardly a waste — it kept me from making a deal I probably would have had reason to regret at some point, one way or another.  But it’s a disappointment.  And it’s the last FSBO I touch, ever.

Proof That People Need Places To Live: 138 Sales In Salem In 90 Days

Boston Sweet Digs Home

Proof That People Need Places To Live: 138 Sales in Salem in 90 Days

Here are three in the mid-to-low range.  My guess is a lot of these are new buyers; I’m hoping that by next year at this time we’ll see the first of the foreclosure-stricken buyers returning to the market, as more and more bankruptcies turn 2 years old and lenders become willing to re-embrace that legion of dis-qualified buyers.

Call me a dreamer….

41 Highland Avenue

Salem, MA 01970

Beds: 4/Baths: 1    

SQ.FT.: 1383    

$ 157,000 

13 Nichols Street  

Salem, MA 01970

Beds: 3/Baths:1.5    

SQ.FT.:  2289  

$ 221,940   

2 Beachmont Road

Salem, MA 01970

Beds: 2/Baths: 1    

SQ.FT.:  1123  

$ 230,000  

 King of Scrounge: 5 Trashpicking Tips To Save (and Post) By!

Boston Sweet Digs Home

King of Scrounge: 5 Trashpicking Rules To Save (and List!) By

I had a landlord a few years ago who thought it was “dirty” when I made 3 trips down the street to pull a wrought iron patio set out of my neighbor’s trash.  She and her teenaged daughter argued about it, and an hour and a can of flat black spraypaint later, the daughter made a point of coming out and complimenting me; it’s a pretty set, and there wasn’t anything wrong with it.

That was when my GF and I were first moving in together, and I had already salvaged a beautiful beveled glass table top, knowing wrought iron tables get tossed all the time….because someone broke the tabletop.  GF sits at  it on sunny mornings and drinks coffee and smells the potted rosemary.

I helped 2 friends move on Monday; the third hadn’t moved in years, and had, in her folly, made it a big joke when she didn’t come near us until we were safely settled in.  And the walls were painted.  Rachel carried her own damned boxes, and no, there’s no storage space at my house.

City folk are a true mystery to me.  Moving from one third-floor JP garret to another third-floor JP garret?  Come on!  Brighton?  On Labor Day?  What were you guys thinking?

The Globe ran a story over the weekend about the amount of trash generated by Labor Day moving in Boston — repulsive.  I saw the paper lying on my friend’s kitchen table while we stood around gulping down water and cinnamon buns, stretching, thinking about those stairs.

Here’s what Boston.com said:

“As part of move-in weekend, officials schedule extra pickups by the city’s two contracted trash-removal companies in neighborhoods like Allston and Brighton, where last year 184 tons of trash were removed over the long weekend.”

I guess no one’s heard of Goodwill — and, anyway, that would take effort and thoughtfulness.  But why not at least post it on Craigslist Free?  (Did you know that microscopic plastic particles concentrate in the bowels of ancient sea turtles, killing these otherwise nearly-immortal creatures by shutting down their excretory systems?  Both gross, and true.  Now pick up that laundry basket and take it to the Salvatin Army!)

My friends tease me for my trash picking — the ones who aren’t so disgusted by the idea of recycling and freecycling that they don’t like to bring it up.  Lately, I’ve scored a beautiful, nearly-new black leather loveseat that looks great near the wood stove, an 8-foot, argon-gas-filled Anderson bow window, 3 smaller double-glazed windows,  6 sheets of rigid foam insulation, and a fairly new GE full-sized double wall oven.  I think I spent $200 in gas.  No one even asked me for money, and they were all glad to get rid of their stuff without having to pitch it into a Dumpster.

You’re not the king of scrounge, even if you got some nice utility shelving off a streetcorner in Lynn, or an old leather car seat to sit in while you play Nintendo.  There can be only one king of scrounge, and I’m claiming the title.  This is grown-up, pickup-truck home industry.  And I think I would have paid $10g for the stuff I saved from the landfill.  Like, a significant chunk of a year’s salary.  In fact, soon-to-be equity in a summer house I’m beginning to rehab.

(Oh, and I got a bathroom sink, some really nice light fixtures, and a Kitchenaid meet grinder attachment from the 1950s.)

(Of course it works.)

Hint:  If you don’t have to pay for materials, you can afford to pay someone to do the work.  There are endless DIY projects, but it never hurts to bring someone in to knock you a few steps forward in your neverending war against leaky waterheaters and wonky ovens.

I’d like to see everybody engaged in this kind of anti-consumption consumption.  You still get the “it’s my birthday” tingle, but without the credit card bills.  Just follow some rules:

1.  Know what you want.  Don’t just fill your house with crap; have plans.  Browse, but don’t hog.

2.  Give when you get.  Pay it forward.  Get a really nice rug?  Shake out a not-as-nice rug and offer it on freecycle or Craigslist.

3.  Only claim things that you have a real plan to pick up.  If you are not very strong, and don’t have a bunch of strong friends, don’t agree to pick up a piano from a thrid floor appartment.  If you agree to take someone’s junk, show up!  Showing up keeps people from throwing stuff out to avoid freecyclers.  Don’t be such a spazz!

4.  Only respond to “curb alerts” that are fresh and really close by.  Don’t drive 45 minutes for a free hot tub that’s listed “out by the curb — first come first serve.”  It’s a huge waste of energy and time.  And money.

5.  Conserve while you reuse.  Don’t drive 50 miles in heavy traffic for an item that’s worth $35.  Let someone else have it, and wait for someone to give one away closer to home.  Everything is free on Craigslist eventually!

The Market Is Moving In Beverly

Boston Sweet Digs Home

The Market Is Moving in Beverly

I was poking around, and was delighted to see 103 results for recent sales in Beverly in the last 3 months.  A lot of these sales look like first time buyers, so the burst bubble has done a lot of people some good, anyway.  We wouldn’t have been able to afford our place 3 years ago, I know that.

Here’s a sampling.  Food for thought.

19 Lovett Street
Beverly, MA 01915
Beds: 3/Baths:1
SQ.FT.:1522
$232,500

6 Cliff Street
Beverly, MA 01915
Beds:3 /Baths: 1
SQ.FT.:1153
$295,000

17 Balch Street Address
Beverly, MA 01915
Beds: 2/Baths:1
SQ.FT.:917
$165,000

Open Houses in Beverly this Weekend…Really???

Boston Sweet Digs Home