Today’s news for the real estate market is all doom and gloom. See Lowell Sun’s article….. http://www.lowellsun.com/todaysheadlines/ci_15888122 

But clearly, this was to be expected with the First Time Buyer’ Tax Incentive ending June 30. Many buyers bought sooner than they might have had there been no incentive.

Here are July’s Downtown Lowell Statistics:

This update reflects an average price per square foot in downtown Lowell of $157,

down $1 from the last average price of $158.                  

ALL LOWELL

                          Nov-09 Dec-09 Jan-10     Units on Market     154 139 141     Avg Days on Market     197 199 169                       01854-10852     109 102 108     Avg Days on Market     186 205 176                   DOWNTOWN           Nov-09 Dec-09 Jan-10     Units on Market     43 44 48     Add Boott, Add DeAngelis     44 45 50                       Avg $ per SqFt ON MARKET   211 217 202     Avg $ per SqFt SOLD     159 162 150                       Avg Days on Market     218 226 130                   DOWNTOWN SALES Number of Units Sold Last 3 Months        Nov-09 Dec-09 Jan-10         TOTAL   4 2 1         AVERAGE 9/mo 5.6/mo 2.3/mo                        

DOWNTOWN INVENTORY

                Inventory equals current units on market divided by average units sold per month       Nov-09 Dec-09 Jan-10             4.7 mos 8 mos 22 mos                                          

OFFICES / SALES

                        Nov-09 Dec-09 Jan-10             L / S / B L / S / B L / S / B       LOWELL LOFTS   0   1   0   1   1   1       REMAX     0   2   0 2  0  0         COLDWELL BANKER               ERA MORRISON               C21     1   0   0 0  1  0         KELLER WILLIAMS               BOOTT MILLS   1   0   0           EXIT                 WILSON WOLFE               STONEWALL               EARTH     0   1   0           EDGE GROUP   1   0   0           MISC     1   0   0  0  1  0      
]]> http://lowellrealtor.wordpress.com/2010/02/05/market-update/feed/ 0 lowellrealtor http://lowellrealtor.wordpress.com/2010/01/07/if-you-dont-buy-a-house-now-youre-stupid-or-broke/ http://lowellrealtor.wordpress.com/2010/01/07/if-you-dont-buy-a-house-now-youre-stupid-or-broke/#comments Thu, 07 Jan 2010 16:45:16 +0000 lowellrealtor http://lowellrealtor.wordpress.com/?p=147 ]]> Interest rates are at historic lows but cyclical trends suggest they will soon rise. Home buyers may never see such a chance again, writes Marc Roth

By Marc Roth

Well, you may not be stupid or broke. Maybe you already have a house and you don’t want to move. Or maybe you’re a Trappist monk and have forsworn all earthly possessions. Or whatever. But if you want to buy a house, now is the time, and if you don’t act soon, you will regret it. Here’s why: historically low interest rates.

As of today, the average 30-year fixed-rate loan with no points or fees is around 5%. That, as the graph above—which you can find on Mortgage-X.com—shows, is the lowest the rate has been in nearly 40 years.

In fact, rates are so well below historic averages that it should make all current and prospective homeowners take notice of this once-in-a-lifetime opportunity.

And it is exactly that, based on what the graph shows us. Let’s look at the point on the far left.

In 1970 the rate was approximately 7.25%. After hovering there for a couple of years, it began a trend upward, landing near 10% in late 1973. It settled at 8.5% to 9% from 1974 to the end of 1976. After the rise to 10%, that probably seemed O.K. to most home buyers.

But they weren’t happy soon thereafter. From 1977 to 1981, a period of only 60 months, the 30-year fixed rate climbed to 18%. As I mentioned in one of my previous articles, my dad was one of those unluckily stuck needing a loan at that time.

Interest Rate Lessons

And when rates started to decline after that, they took a long time to recede to previous levels. They hit 9% for a brief time in 1986 and bounced around 10% to 11% until 1990. For the next 11 years through 2001, the rates slowly ebbed and flowed downward, ranging from 7% to 9%. We’ve since spent the last nine years, until very recently, at 6% to 7%. So you can see why 5% is so remarkable.

So, what can we learn from the historical trends and numbers?

First, rates have far further to move upward than downward; for more than 30 years, 7% was the low and 18% the high. The norm was 9% in the 1970s, 10% in the mid-1980s through the early 1990s, 7% to 8% for much of the 1990s, and 6% only over the last handful of years.

Second, the last time the long-term trends reversed from low to high, it took more than 20 years (1970 to 1992) for the rate to get back to where it was, and 30 years to actually start trending below the 1970 low.

Finally, the most important lesson is to understand the actual financial impact the rate has on the cost of purchasing and paying off a home.

Every quarter-point change in interest rates is equivalent to approximately $6,000 for every $100,000 borrowed over the course of a 30-year fixed. While different in each region, for the sake of simplicity, let’s assume that the average person is putting $40,000 down and borrowing $200,000 to pay the price of a typical home nationwide. Thus, over the course of the life of the loan, each quarter-point move up in interest rates will cost that buyer $12,000.

Loan Costs

Stay with me now. We are at 5%. As you can see by the graph above, as the economy stabilizes, it is reasonable for us to see 30-year fixed rates climb to 6% within the foreseeable future and probably to a range of 7% to 8% when the economy is humming again. If every quarter of a point is worth $12,000 per $200,000 borrowed, then each point is worth almost $50,000.

Let’s put that into perspective. You have a good stable job (yes, unemployment is at 10%, but another way of looking at that figure is that most of us have good stable jobs). You would like to own a $240,000 home. However, even though home prices have steadied, you may be thinking you can get another $5,000 or $10,000 discount if you wait (never mind the $8,500 or $6,500 tax credit due to run out next spring). Or you may be waiting for the news to tell you the economy is “more stable” and it’s safe to get back in the pool. In exchange for what you may think is prudence, you will risk paying $50,000 more per point in interest rate changes between now and the time you decide you are ready to buy. And you are ignoring the fact that according to the Case-Shiller index, home prices in most regions have been trending back up for the last several months.

If you are someone who is looking to buy or upgrade in the $350,000-to-$800,000 home price range, and many people out there are, then you’re borrowing $300,000 to $600,000. At 7%, the $300,000 loan will cost just under $150,000 more over the lifetime, and the $600,000 loan an additional $300,000, if rates move up just 2% before you pull the trigger.

What I’m trying to impress upon everyone is that if you are planning on being a homeowner now and/or in the foreseeable future, or if you are looking to move your family into a bigger home, then pay more attention to the interest rates than the price of the home. If you have a steady job, good credit, and the down payment, then you really are being offered the gift of a lifetime.

Marc Roth is the founder and president of Home Warranty of America, which touches just about every part of the real estate industry since it sells through builders, real estate agents, title companies, mortgage companies, and directly to consumers.

Analysis  of the

DOWNTOWN LOWELL, MA  MARKET

Yes, you can. You can still own your own loft and receive $8,000 from Uncle Sam!

If you’re a 1st time buyer, and still thinking about taking the plunge, there’s still time. But not much, you must act quickly. LowellLofts’ can help you get it done. Stop paying rent and throwing $$ away each month.

Speak to our mortgage specialist below about your possibilities today.

Mortgage Network

Tom DeBenedictis

Cell: 978.758.3512

400 Amherst Street Nashua, NH 03063

800.491.0964

No time is more critical than the present time. LowellLofts and our Mortgage Professionals can help you TODAY!

By Ian B. Murphy

Banker & Tradesman Staff Writer

Today

The principal and interest payments for the loan will be deferred until June 1, 2010, to allow first-time homebuyers to pay back MassHousing with their federal tax credit. If loans aren’t paid by the June deadline, they will be amortized for 10 years at the rate of their original mortgage.

Gary Rogers, president of the Massachusetts Association of Realtors (MAR), said not paying back the loan with money saved from the tax credit is still a decent option.”If that’s what the homebuyer opts to do, that’s still an excellent program; usually second mortgages have much higher rates,” Rogers told Banker & Tradesman.

The loans will be available only to homebuyers with MassHousing mortgages, through MassHousing-approved lenders. To be eligible, loan participants must use the home purchased through the program as their primary residence for at least three years, and must purchase a one, two, three or four-family home from a seller unrelated to the buyer by Nov. 30.

“These loans will both help prospective homebuyers achieve the comfort and stability of homeownership for their families, and also stimulate the commonwealth’s economy through increased home sales, while reviving neighborhoods impacted by foreclosure,” Patrick said in a statement.

This is the first program of its type in Massachusetts, according to Rogers, but there have been other variations of the same theme in other states. MAR worked with Patrick, Lt. Gov. Timothy Murray, and MassHousing to bring the program to fruition. “It’s a partnership; we’re right there with them, and we’ll be making sure that our Realtors inform the people who this is aimed for, and that they know about the program,” Rogers said.

“The Tax Credit Loan will be of great benefit to homebuyers, Realtors and MassHousing-approved lenders, and we applaud the Patrick-Murray administration for its leadership in promoting affordable homeownership opportunities in Massachusetts,” said MassHousing Executive Director Thomas R. Gleason.

We’ve all seen a relatively slow market downtown for Jan, Feb, Mar, with a bit of a pick-up for April. But May is a different story, here’s how and why:

The data we use is from MLSpin – our market source for the Merrimack Valley, Middlesex County and surrounding areas. We go back 3 months at a time analyzing the data. Each new month wipes out the first month in the series, example: Last month’s spread was Feb-Mar-Apr, this month’s is Mar-Apr-May, wiping out Feb, making the numbers change being more reflective of what’s truly happening. It could be pinpointed down even further by including locations of the sales, isolating the ‘hot’ buildings and the ‘not-so-much’, but what we have now is very interesting.

Currently there are 56 units on the market in downtown. The last three spreads say 48/49. Doesn’t seem like much of a difference, but at this time, there are 17 properties ‘under agreement’ . Add this to the current market and we get 73 units. So how could this number not relect in the months prior market availability?

The answer is simple:

14 of the 17 ‘under’agreement’ happened in the last 3 months, 6 in May alone. Anticipated ‘sale dates’ are 13 in June, 1 in July, and growing!

This means some properties are going under agreement in less than 30 days, explaining the seemingly ‘flat’ number of units available. They’re ‘gone’ before you see them. This market has really picked up and so have interest rates: up to 5.23% from last month’s 4.81% (www.bankrate.com)

What’s the underlying cause of this activity increase? Here’s a very simple explanation:

1. The $8,000 First-time Buyer Tax Credit (over on Nov 30, 2009)

2. Low interest rates (not for long)

3. Spring market fever (savvy buyers have been watching downtown Lowell for a while and are realizing-Now Is The Time!)

The train is pulling away from the station folks! If you’re in the market to ‘buy’, procrastination will cost you dearly in respect to interest rates, and closing before Nov. 30. Market inventory is dropping, desirable ‘priced-right’ units go fast to the ready, willing, and able.