Case-Shiller: Spring Finally Arrives for Boston Home Prices

It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). The Case-Shiller data is generally considered to be the most reliable measure of overall home price changes for a region, since they only consider repeat sales of homes when calculating their index, instead of looking at all the homes that sold in a given month.

For the full source data behind this post, hit the S&P/Case-Shiller website. For a more detailed explanation of how the Case-Shiller Home Price Index 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).

Here are the basic Case-Shiller stats for the Boston area* as of May:

Only three of the twenty metro areas tracked by Case-Shiller saw a decrease in their HPI between April and May (down from 7 in April and 18 in March). Boston ousted DC for the biggest increase, gaining 2.7% on the month. Only Tampa, Las Vegas, and Detroit continued to fall.

Here’s a look at the latest local tiered data, back through 2000:

And here’s a closer look at the recent changes, with the vertical and horizontal axes zoomed in to show just the last year:

Things took a while to warm up this year in Boston, but now that they did, Boston clocked in the highest month to month increase of any Case Shiller city. Month to month, the low tier was up 3.9%, the middle tier rose 2.3%, and the high tier increased 2.0%.

Read the rest of this entry »

Hot Weather, Cool Market (June 2011 Insider)

Redfin’s monthly Boston real estate insider report draws from our proprietary database of information on homes for sale and that just sold, along with insight from our agents to get a sense of what’s going on in the market right now. If you’d like to receive the report via email, just sign up.

Greetings Boston Redfinnians!

As the heavy heat and humidity descends and we enter the thick of the summer, sales numbers continue to slump from last year’s home buyer tax credit-fueled highs.

May was missing the typical spring pop and June was looking downright scary for a while, but the real test is always July. With the 45-60 day sales cycle for most real estate transactions, the spring market’s health really becomes clear in the June and July closings. The spring market did indeed get moving, but just not as much it has in the past year. The number of July closings indicates that there was a nice jump in sales from last month, but not enough to offset the continuing rise in inventory.

The real question isn’t will prices come down on this abundance of properties, but can they? Lots of sellers seem to still be pricing their properties high, but many sellers probably have to price high in order to recoup money or merely soften their losses.

Inventory Goes Up

Inventory continues to grow in many areas and is certainly up across the board from last year. Cambridge seems to be leveling off a bit, but Somerville and Brookline are both increasing month-to-month at a surprising pace, considering demand.

Harry Silverstein, a Redfin agent who lives and works in Brookline, has noticed that “the market is still relatively brisk for well-priced properties, but there’s a bit of a penalty for sellers who don’t price accurately. It certainly feels like there are more homes to choose from since the spring; homes are coming onto the market and sticking around longer than they were just a month or so ago.”

Change in # of Houses for Sale on June 30th 2011

We expect that demand will increase after the 4th of July break; if buyers are willing to brave the hot & hazy weather, we might see a nice jump in sales over the next month. We’ll have to keep an eye on sales figures through July and August to get a true picture of the spring/summer market.

Sales Go Down

The flipside of the increase in inventory continues to be the decreased numbers of sales compared to last year. This certainly has something to do with the lack of the home buyer tax credit, but also points to the overall lack of immediacy for many would-be buyers.

Change in # of Houses That Sold in June 2011

Given the current climate of economic instability, buyers seem to be waiting on the sidelines. We’re certainly feeling the lack of demand in our day-to-day business.

Prices Go Nowhere

Prices seem to have remained fairly stable, with no major fluctuations in median value for most areas, but the more interesting story is in the details. The drop in median price-per-square-foot hints that higher-priced properties sold well earlier in the season, but high-end sales may be slowing down a bit in the summer.

Change in Median Price of Houses That Sold in June 2011

Will prices come down enough to spark the currently lackluster demand? If the economy can gain some traction and all of the natural disasters, political upheavals and dips in consumer confidence can fade out, low interest rates may keep buyers interested in finding their dream homes.

The Fed has stopped buying new mortgage-backed securities and is only replenishing its current levels, so it’s anybody’s guess as to what will happen to rates in the long term. Our guess is that we should start to see a rise in rates in the next six months.

Says Redfin partner lender Sofia Travayiakis: “Given the low inflation rates and slow growth, we’ve seen reports this week that rates will be up into the low 5%s, but not much higher than that in the short term, or likely even through winter.”

If you can afford a home and have the energy, there seems to be good inventory to choose from in most areas, and money is still cheap. Hot homes move quickly but the soft demand should make finding what you want a bit easier. Good luck, and we’ll see you out on tour!

That’s it for this month’s report. Want to know what’s happening in your neighborhood? Download our comprehensive spreadsheet and dig into the data for yourself! Inside you’ll find county, city, and neighborhood information galore. To learn more about how we calculate these numbers, check out our methodology page. You can also liven up the place by posting a comment below.

Best,

Alex Coon
Boston Market Manager

Android!!!!

In case you missed it over on the corporate blog, Redfin has just launched our Android app!

(And there was much rejoicing.)

Android fans have been very, very vocal about wanting their own Redfin app, and thanks to the hard work of a crack team of engineers, the day has arrived.

Go find out more! Go! Go you crazy kids! Be free!

Photo courtesy Stéfan via Flickr.

Sweetly Dig Into Redfin’s Local Stats

Case-Shiller: Spring Slow to Arrive in Boston as Home Prices Slip

It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). The Case-Shiller data is generally considered to be the most reliable measure of overall home price changes for a region, since they only consider repeat sales of homes when calculating their index, instead of looking at all the homes that sold in a given month.

For the full source data behind this post, hit the S&P/Case-Shiller website. For a more detailed explanation of how the Case-Shiller Home Price Index 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. – April data is released in June).

Here are the basic Case-Shiller stats for the Boston area* as of April:

Only seven of the twenty metro areas tracked by Case-Shiller saw a decrease in their HPI between March and April (down from eighteen the previous month). The biggest increase was in Washington DC again with a solid 3.0% gain. Other markets that saw increases above 1% were San Francisco (+1.7%), Atlanta (+1.6%), Seattle (+1.6%), Denver (+1.5%), and Cleveland (+1.2%).

Here’s a look at the latest local tiered data, back through 2000:

And here’s a closer look at the recent changes, with the vertical and horizontal axes zoomed in to show just the last year:

Although the middle tiers gained a bit of ground this month, Boston’s low tier and high tier continued to slip. Month to month, the low tier was down 4.1%, the middle tier rose 1.6%, and the high tier decreased 0.3%.

Read the rest of this entry »

Redfin Boston Gets Personal

Big news! Redfin Boston is upgrading our service. Now, whenever you sign up to tour a home or meet an agent, the lead agent who negotiates your deal will also be the one who meets you on the first tour, sees the home and comes to the closing table. The commission refund we offer buyers will, as a result, decrease slightly from 50% of the commission to 33% of the commission.

Customers Love the Personal Service
We think this is really going to take off in Boston. We tried it out in one small part of Los Angeles January through March and our customers loved it: you still get an agent on your side, paid to put customers not commissions first, using tools that keep you in the loop at every step. But now that agent can really get to know you and your needs along the way.

A 33% Commission Refund
Our fee for selling a home is unchanged at 1.5% of the home price. But the commission refund for home-buyers changed so that it’s usually one-third of whatever the seller pays us, paid within a few days of closing. For a $500,000 home in Boston, the typical refund would be $4,167. Our main website has all the details on the new commission refund.

Existing Customers, Relax: We’ll Honor the Old Refund Through October 1
Customers who have already contacted us to tour a home, talk to an agent or write an offer will still get the larger refund, usually worth one half of whatever commission we get, on any purchase closed by October 1, 2011.

We’re limiting this new level of service to Boston, but we hope it fits better with what most people want in a real estate agent: the personal service offered by the best agents in brokerages of all types, combined with what really what makes Redfin different, our advocacy, transparency and technology.

If you’d like meet a Redfin agent to see how the whole process works or to learn how the double dip is hitting your local neighborhood, browse the reviews of our Boston-area agents and find an agent you like.

Fannie Mae Covers Closing Costs on HomePath Properties

As part of their neighborhood stabilization program, Fannie Mae is offering buyers’ assistance through a couple of different programs, HomePath and First Look.

HomePath

HomePath helps buyers buy covering their closing costs, up to 3.5% of the home’s purchase price.

To qualify, buyers must be purchasing a HomePath property; this is a home that is owned by Fannie Mae, usually as the result of a foreclosure or owner forfeiture.  Buyers need to make the initial offer on the home on or after June 14, 2011, and the purchase must close by October 31, 2011; initial offers made prior to June 14 are not eligible.

• View full details on qualifying for this program.
• Search for HomePath properties.
• Read an FAQ on the HomePath program.

First Look

In addition to HomePath program, Fannie Mae also offers an edge to buyers hoping to purchase a primary residence (as opposed to investors, or buyers looking for a second home). Under the First Look program, only offers from primary-residence buyers will be considered during the first 15 days that a Fannie-owned REO property is on the market.

Redfin agents and partner agents are always available to help you make a purchase on a Fannie Mae-owned property.

Waving as I Run By

Hey everyone!

I wanted to say a big fat wet sloppy thank you to everyone who participated in last week’s reader poll. There were nearly 800 of you, and almost everyone had something useful, informative, or enlightening to contribute.

(There was, of course, a small but vocal minority who did nothing but make dirty jokes and request that we start posting illicit photos, but that’s life on the intertubes.)

We got so many responses with so many good suggestions, in fact, that I’m basically drowning over here. I promise I’ll give y’all a nice, thorough run-down of the results, but as for today, I’m going to give you the Xtreme Reader’s Digest version.

Big Winners:

Updates on the local market, market statistics, and profiles of local neighborhoods were the top three requests, in that order. Message received. You want more hard data, more often, and more tightly focused on the neighborhood level.

Interesting Thing I Noticed:

We had a lot of requests for things that are already on Redfin, which tells me that we’re not doing a great job making that stuff easy to find. That’s pretty much my fault.

For instance, tips about home buying was a very popular request, and we have an entire free online guide for home buyers right here. It has a ton of information on the entire home-buying process, much of it tailored to each individual Redfin market.

Other Interesting Thing I Noticed:

Readers seem to fall into two camps: people who want more “fluff” (like cool homes, tips on design, stories from agents, etc.) and people who want no fluff at all and think fluff is stupid and would punch me in the face right now if I would just stop saying “fluff.”

I don’t think there’s a way to make every post appeal to everybody, but it does seem like more variety will keep everyone intermittently not-unhappy. And what more could you ask, really?

By Popular Request:

Finally, a lot of people asked in the free-form comments why we don’t just go back to the old days, when we had lots of different bloggers writing content for every city’s version of Sweet Digs. This was all before my time, but basically it was just too big an operation for us to handle at that point, and we needed to focus more on the core business (which is, of course, panda-cloning.)

We also had the loose-cannon issue crop up a couple times; bloggers saying things in the Redfin name that were completely ridiculous, like that we were cloning pandas.

But moving forward, we do want to distribute the writing work on our blogs out a bit more, both among our agents and (possibly, don’t quote me on this) among non-employees.

How will we approach that? No idea. I’m making this up as I go.

More soon on the survey results, including a downloadable spreadsheet of the results (stripped of any identifying reader info, naturally).

Until then, thanks again, and keep the good ideas coming.

Stuck in the Spring Mud (May 2011 Insider Report)

Redfin’s monthly Boston real estate insider report draws from our proprietary database of information on homes for sale and that just sold, along with insight from our agents to get a sense of what’s going on in the market right now. If you’d like to receive the report via email, just sign up.

Greetings Boston Redfinnians!

The Boston housing market is still spinning its wheels, stuck in a quagmire of flat demand and a huge inventory of homes that nobody seems to want. If things don’t change soon, we could be wading through the muck all summer.

But the bad economic news keeps flowing downhill. The stock market is just a wee bit on the unsteady side, employment numbers are weak, gas prices are high, and home prices around the country are already in the clutches of the dreaded double-dip.

Let’s take a closer look at our inventory, sales, and prices for May.

Water, Water Everywhere…

As you can see in the chart below, inventory is up. We’re practically swimming in it. It seems like there should be plenty of homes to go around, especially since buyers aren’t exactly flooding the market.

Change in # of Houses for Sale on May 31st 2011

But it’s the same old story we’ve been crowing about for months: there are lots of homes on the market, but few good ones. In a sea of unwanted inventory, buyers are fighting bidding wars over the islands of quality: good homes that are priced well.

For instance, look at the numbers for Cambridge and Somerville condos in the inventory chart above. Inventory is much higher than it was a year ago. But those units aren’t moving.

“Our clients have a lot more to choose from right now,” observes Redfin Cambridge agent Shawn Flynn. “We’re showing more properties more frequently, and buyers are starting to get comfortable with the market. There are a lot of great places for sale, but prices will need to come down before buyers will bite.”

Sales: Slightly Better than Horrible

The sales numbers back up Shawn’s observations; despite the growth of inventory, sales are down sharply from this time last year. Granted, May’s numbers are generally better than April, but that’s a bit like saying you can outrun Rodin’s The Thinker; April’s numbers were just bad.

Change in # of Houses That Sold in May 2011

Then again, even comparing to last year’s sales numbers is a tricky business, because last year’s demand was artificially inflated by the government tax credit for home buyers.

In fact, it’s hard to say we’ve had a “typical” housing market in years; it’s been a parade of bubbles, crashes and stimulus packages for some time now. Potential buyers seem happy to ride out the uncertainty by renting, but that might not last; rents are going up and mortgage interest rates are very low, making buying a (potentially) more attractive option. But without a broader sense of economic stability, will buyers take the plunge?

As usual, it all comes down to prices.

Prices Between a Rock and a Hard Place

So, buyers aren’t willing to budge unless they find a good deal on a good house. Will sellers respond by dropping prices?

Maybe the question should be, can sellers respond by dropping prices? Sellers who bought their homes during the bubble years probably can’t afford to sell for today’s more depressed prices. So far, sellers are generally holding their ground on prices, or just sitting on the sidelines and hoping for better days.

Change in Median Price of Houses That Sold in May 2011

At some point the cheap cost of money and rising rents will probably push at least a few more buyers off the fence, but summer is traditionally the strongest season for home sales. If sales don’t recover before fall, we might just go right back into hibernation.

Want to know what’s happening in your neighborhood? Download our comprehensive spreadsheet and dig into the data for yourself! Inside you’ll find county, city, and neighborhood information galore. To learn more about how we calculate these numbers, check out our methodology page. You can also liven up the place by posting a comment below.

Best,

Alex Coon
Boston Market Manager

What Do You People WANT?

I’m just going to level with y’all.

It’s one of my performance goals to write one of these blog posts every week, and every week, I approach the goal with a healthy heapin’ spoonful of a little something I like to call dread, or as they call it in German, dredenscheiningruvenshtocken.*

Now at first I thought that this dread was just some sort of performance anxiety, but I had an epiphany yesterday. Okay, maybe epiphany is a little strong. Maybe “duh-moment” would be more accurate.

I have no idea what you guys and gals want to read about. None at all.

But I’m not supposed to admit that, right? I’m supposed to just keep trying different articles and then track your pageviews like I’m some sort of criminal mastermind, then slowly and gradually hit on a winning formula of pure crowd-pleasingness; drawing you in, addicting you to content without you ever even knowing it. Mwa ha ha.

Frankly, that sounds like a lot of work, and really, I’m not the mastermind type. So I thought I’d just ask. Nicely.

So, could I please ask you to take a minute to fill out a little survey I came up with? Please? Pleeeeeease? (It helps if you picture me staring up at you with big puppy-dog eyes. It works especially well if you picture me as an actual puppy.**)

Take the Sweet Digs survey!

I can’t really promise you any toys or treats or anything, but I can promise that I’ll do my best to give you something worthwhile to read. And then everybody wins.

Thanks all!

*Not real German. Sorry Germany!
**Seriously, can you imagine that? Some cute puppy sitting at a keyboard, typing away with his little paws? That would be adorable!