The Market Wrap-Up For August

Let’s take at look at the August numbers for eastern Massachusetts and see how they compare to a year ago.

Single-Family Homes, Condos & Multi-Family Properties

• 4,667 homes sold, down from 4,718 in August 2008
• The median sales price was $328,000, down from $335,000 in August 2008
• Homes that sold were on the market an average of 116 days, down from 121 days in August 2008.

We pulled these numbers from MLSPIN.

Dig Deeper Into the Trends

These numbers are for eastern Massachusetts. To see what’s happening in your neighborhood, check out our stats & trends pages.

What did you see in August?

37% Of Offers Are On Homes With Multiple Offers

In August, our Boston-area agents presented 46 bids on homes for sale and 17 of them, or 37%, were on homes with at least one other offer.

Many of these competitive situations are in popular communities like Belmont, Arlington and Cambridge. Redfin agent Adam Welling has seen lot of multiple offer situations in Somerville:

Right now, buyers are pouncing on well-priced homes in a good areas. In Davis Square, we’re seeing a lot nice condos in 2-3 unit buildings get 10+ offers and go under contract quickly.

3 Tips For Buyers

Hannah Driscoll, the #1 buyers’ agent in eastern Massachusetts in August, has three tips for buyers:

1. Determine your maximum price: Know how high you can go before you bid so you don’t have to figure this out during negotiations
2. Know what’s for sale: Be ready to make an offer as soon as you see something you like
3. Lead with your best offer: Try to put least 20% down and have a quick closing period

In the last two days, Hannah has presented three offers on single-family homes with multiple bids:

• Belmont house listed around $450,000 had five offers, four of which are over the list price
• Cambridge house listed around $700,000 had three offers, all over the list price
• Newton house listed around $770,00 had three offers

For more numbers, download the spreadsheet with the data on what happened in August.

Where are you seeing homes with multiple offers?

Hannah Driscoll Is The Top Buyers’ Agent In Massachusetts

August was another great month for our greater Boston agents! Of the 4,600+ buyers’ agents who closed a deal in August, we have two in the top five:

When you work with Redfin, you work with some of the best agents in the greater Boston area. Hannah, Adam and Sean know what’s going on in the market right now because they spend all of their time serving clients: touring homes, writing offers and closing deals.

We pulled these numbers from MLSPIN, the database for real estate transactions and listings for Massachusetts, and ranked agents who represented home-buyers of single-family homes, condominiums and multi-family buildings in August based first on number of deals, then by total dollar amount.

Our Clients Love Our Service

We survey every client and track every transaction in a central customer database. For the surveys we received in August from our clients in the greater Boston area:

• 39 clients responded to our customer-satisfaction survey and posted a review online, up from 35 in July.
• 39 of those clients, or 100%, would recommend Redfin to a friend, the same rate from July.

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.

First-Time Buyer Hoping To Get The $8,000 Tax Credit? You Have 12 Days To Find A Home

The federal government is offering first-time home-buyers a tax credit of 10% of a home’s sales price up to $8,000. To qualify, you must close on a home by November 30th; if you close on December 1st, you’re out of luck.

If you’re a first-time buyer in greater Boston, you have less than two weeks left to find a home, make an offer and negotiate terms if you hope to close in time to get the $8,000 tax credit.

Close By November 13th

In a normal month, about 20% of closings slip from the last week of a month to the next. This number will almost certainly be higher in November due to the expected rush of buyers trying to get the tax credit and because November 30th falls on the Monday after Thanksgiving.

If you’re hoping to get the tax credit, you want to make sure you’ve closed before the week of Thanksgiving because it’s not a full work week:

• Thursday, November 26th: Turkey day. A day to give thanks and watch the Detroit Lions go for six Thanksgiving Day losses in a row.
• Friday , November 27th: Unofficial holiday. Everybody is recovering from their day of gluttony.
• Saturday & Sunday, November 28th & 29th: The banks aren’t open so you can’t close.
• Monday, November 30th: The last day to close and qualify for the first-time buyer tax credit. It’s going to be a goat rodeo.

To give yourself the best chance of getting the tax credit, plan on closing by November 13th. If you run into any problems during closing, you’ll have more than a week to work things out and still qualify for the tax credit.

Get An Offer Accepted By September 20th

Right now, it’s taking our Boston-area clients an average of 54 days to close once they reach initial agreement on terms. This means if you want to close by November 13th, you need to get an offer accepted by September 20th. That’s 12 days away.

For more information, check out the Home Buyer Tax Credit FAQ from the IRS and get all the details about the tax credit from the agency giving the credit. Also, check out the report that this program may be extended.

Find A Home You Like

Don’t rush into a purchase. Make sure you’re buying because you’ve found a home you want to live in, not because you want the $8,000. You don’t want to end up in the wrong house in the wrong neighborhood with the wrong commute just for a few thousand dollars.

Biggest Discounts (Belated) August Update

I apologize for the tardiness of this post. Unfortunately I did not receive the data until almost the end of the month.

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 city. 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 twenty 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 dropped slightly from June to July, moving from 4.4% to 4.1%. Way down south in Mashpee they had the biggest discount by far.

Here are the ten areas with the smallest discounts:

Of the 107 areas we ranked, the median discount was 3.57%.

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 6,258 sales we tracked in the 1-month period, 107 homes sold for 10% or more off the asking price, while just 26 homes sold for 5% or more above the asking price.

Case-Shiller: Nationwide Markets Simultaneously Bouncing Up

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. – June data is released in August).

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

Sixteen of the twenty metro areas tracked by Case-Shiller saw an increase in their respective seasonally-adjusted HPIs between May and June. Only Las Vegas, Detroit, Seattle, and Charlotte still saw seasonally-adjusted drops month-to-month.

Despite having seen some of the smallest overall declines since its respective peak, Boston seems to be experiencing one of the strongest gains in this spring’s nationwide bump. This is probably due at least in part to the fact that Boston’s seasonal bounces seem to be stronger than most other cities every year.

Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves:

Here’s our peak decline 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 quite noticeable in both of the above charts that almost every city we’re tracking seems to have taken a sudden upward turn with the most recent few months of data. Despite the fact that there was a nearly two year spread in when the various markets hit their peak (Boston in September 2005, Seattle in July 2007), nearly every market appears to have turned a sharp corner to the positive after “bottoming” in March or April.

A commenter on my Seattle site made an astute observation about this phenomenon this morning:

Since it is still essentially true that “real estate is local”, what could cause every city to suddenly and simultaneously reach an equilibrium point where prices reversed course?

Answer: it just so happens that the home buyers’ tax credit was enacted with the American Reinvestment act (stimulus package) effective February 17, 2009. March 2009 was the first full month that American home buyers had the tax credit as an incentive. It changed their behavior and made them buy homes. It also expires on December 1, 2009 unless it is extended.

Once again, government policy is impacting asset valuations. Either we’re seeing a lasting nationwide housing bottom marked by an extraordinarily well-timed tax incentive, or a new “bubblet.” Case Shiller won’t tell us which until 2010.

It remains to be seen whether the NAR’s lobbying efforts to get the $8,000 tax credit extended beyond November will be successful. And even if they do convince Congress to extend it, the effect may be largely diminished. The program may have already pulled forward as many sales as it can during its spring and summer run.

*[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.]

50% Of Our Clients’ Offers Were On Homes With Multiple Bids

In July, half of the offers we presented to listing agents were on homes with at least one other offer.

“We’re seeing a lot of multiple offer situations in Belmont, Brookline, and Arlington,” says Adam Welling, the top buyer’s agent in eastern Massachusetts. “In Belmont, it’s the homes over $500,000 that are getting a lot of attention, while in Brookline and Arlington, there’s a lot of activity on condo units in mid-rise buildings.”

Tips For Bidding On A Home With Multiple Offers

For Adam, the best strategy is to act quickly and lead with a strong offer:

Know the market and what you want so you’re ready to jump when you see something you like. To show the sellers you’re a serious buyer, make your first offer count.

The Busy Season Is Going Into Extra Innings

Traditionally, the Boston real estate market heats up in June and July and begins to slow in August. This year June and July were busy, but we’re not seeing things taper off like normal. This past weekend our Boston agents received a ton of offers to write up and present to listing agents.

This is due to two things:

1. The first-time home-buyers tax credit expires soon. To qualify for the tax credit you need to close on your home by November 30. In Boston, it’s taking more than 50 days after agreeing to terms for our clients to take possession of their homes. If you’re hoping to get the tax credit, you have a little over two months left to find a home.
2. Interest rates are still low. While mortgage interest rates are not as low as they were earlier in the year, they are still well-below historical levels.

What trends are you seeing in the Boston market right now?

The Market Wrap-Up For July

Let’s take at look at the July numbers for eastern Massachusetts and see how they compare to a year ago.

Single-Family Homes & Condos

• 4,577 homes sold, up from 4,223 in July 2008
• The median sales price was $330,000, down from $344,000 in July 2008
• Homes that sold were on the market an average of 120 days, down from 124 days in July 2008.

We pulled these numbers from MLSPIN.

Dig Deeper Into the Trends

These numbers are for eastern Massachusetts. To see what’s happening in your neighborhood, check out our stats & trends pages.

This is our first monthly report on the inventory trends in the Boston area. What numbers would you like to see in our August wrap-up?

Redfin Has The Top Three Buyers’ Agents In Eastern Massachusetts

June and July have been amazing months for our greater Boston agents!

In June, Sean and Hannah were the top two buyer’s agents in the Boston area. In July, our Boston team has the top three spots:

It’s great to see that since starting in late April, Adam has quickly adjusted to working at Redfin. He’s hitting everything out of the park (if only Papi would follow his example, we’d be chasing the pennant, not the wild card!).

When you work with Redfin, you’ll be working with some of the best agents in the greater Boston area. Adam, Sean and Hannah know what’s going on in the market right now because they spend all of their time serving clients: touring homes, writing offers and closing deals.

We pulled these numbers from MLSPIN, the database for real estate transactions and listings for Massachusetts, and ranked agents who represented home-buyers of single-family homes and condominiums in July based first on number of deals, then by total dollar amount.

Our Clients Love Our Service

We survey every client and track every transaction in a central customer database. For the surveys we received in July from our clients in the greater Boston area:

• 35 clients responded to our customer-satisfaction survey and posted a review online, down from 44 in June.
• 35 of those clients, or 100%, would recommend Redfin to a friend, up from 98% in June.

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.

We’re also thrilled that four of our clients gave us five-star reviews on Yelp. Here’s part of what steve m. said in his review:

I just recently purchased my first home using Redfin and with all else being equal, I actually can’t understand why you wouldn’t use them. I was fairly uneducated about the process – but they guided me through it all from the offer to the P&S, inspection and closing. they had great references for everything you need throughout from inspectors to attorneys. Nancy was great on home tours and Sean excellent throughout the offer/closing process.

For more numbers, download the spreadsheet with the data on what happened in July.

From Newlyweds to Homeowners in One Summer

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.