Massachusetts Home Buyer Guide - For MA Home Buyers, By An Exclusive Buyer Agent

Mortgage Relief For Short Sales. What?

Richard Rosa (Buyers Brokers Only, LLC) — Sat, 24 Oct 2009 20:38:51 -0500

The U.S. Treasury is set to announce a plan to expand mortgage relief efforts to include short sales by providing a closing cost incentive to homeowners and lenders, the Realty Times reported October 22, 2009.

Now that sounds like a complete waste of taxpayer money.

A short sale occurs when the bank allows the sale of a home for less than the existing mortgage balance.

It's a strategy to avoid foreclosure, but banks have been more likely to let a home go into foreclosure, rather than short sell it, even if it means holding the property during moratoriums set by some jurisdictions, such as Massachusetts.

Why you ask? It's because short sale offers often come in well below the last appraisal or any reasonable amount, real estate agents don't want the extra work and time involved and buyers fear a four-to-five month transaction period that could end in the bank refusing to accept the short sale.

My office has had some success closing short sales, but deals that fall apart usually end with unhappy clients, and the result simply isn't our fault. Sometimes it is easier to just avoid the problem altogether.

To help move more distressed properties through to closing, the Treasury, under the Making Home Affordable's Home Affordable Modification Program, is expected to announce a $1,500 closing cost incentive for those who agree to short sales or deed-in-lieu deals, which is when the deed is transferred to the lender, avoiding the more costly foreclosure proceeding.

The U.S. Treasury will also pay the lender $1,000 for accepting a short sale or deed-in-lieu deal. Haven't the taxpayers done enough for banks?

A better approach would be a law that requires lenders to accept or reject all short sale offers within 30 days. In addition, if the property sells after foreclosure for less than any rejected short sale offer, a lender should be barred from pursuing the borrower for any short fall between the sale price and the balance of the mortgage.

Earlier this year when the plan was first considered, there was also a provision to pay second lien holders up to $1,000 to waive their claim in such transactions.

Debate Over $8,000 Tax Credit Rages On

Richard Rosa (Buyers Brokers Only, LLC) — Sat, 24 Oct 2009 13:21:05 -0500

The $8,000 first-time home buyer tax credit has generated a lot of discussion in the main stream media, as well as on various blogs and in YouTube videos.

Those opposed to the first-time home buyer tax credit argue that it is a federal government hand out that the nation cannot afford. In addition, opponents of extending the first-time tax credit believe the vast majority of people who purchased a home would have done so without the credit; however, some reports put the number of people who purchased a home because of the tax credit at between 300,000 and 400,000.

A recent report that thousands of tax credit are fraudulent (apparently a four-year-old filed a claim) has given opponents more evidence that the program is a waste of federal tax dollars.

With local, state and national Realtor and home builder associations voicing strong support to Congress and the Obama Administration, a tax credit extension seems likely. Various proposals to extend the tax credit are competing in the U.S. Senate. One proposal would simply extend the tax credit through June. Another proposal would increase the tax credit to $15,000.

U.S. Senate Majority Leader Harry Reid of Nevada recently suggested yet another proposal that would extend the current tax credit four months and then phase it out over the course of 2010. The value of the credit would decline $2,000 every quarter. U.S. Speaker Nancy Pelosi apparently wants to extend the credit to all home buyers, not just first-time home buyers.

Supporters of the tax credit argue that the tax credit has stabilized the U.S. housing market, an important piece of the nation's economy. Realtor groups claim that each home purchase adds $63,000 to the economy. In addition, housing inventory around the U.S. has declined, putting inventory closer to normal levels.

I think the tax credit should be extended and expanded. I would be happy with an extension until June 30, 2010. I also think all home buyers, not just first-time home buyers, should be eligible for the tax credit. In addition, the income limits should be double to $150,000 for an individual and $300,000 for joint filers. Finally, the tax credit should be for existing homes only, not new construction. Such a limitation would discourage building in states that still have a glut of new homes.

Virtually all of my clients that are eligible for the tax credit have told me they plan to use the tax credit to improve the property. There isn't any doubt in my mind that this tax credit is putting people back to work, and that is not a waste of taxpayer money.

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Massachusetts Foreclosure Deeds Decline In May

Richard Rosa (Buyers Brokers Only, LLC) — Tue, 23 Jun 2009 09:30:01 -0500

The number of foreclosure deeds recorded in Massachusetts declined by double-digit percentages in May 2009 compared to May 2008 and April 2009, The Warren Group, a publisher of real estate data, reported June 18, 2009; however, the number of foreclosure proceedings started by banks and other types of lenders dramatically increased during the same period.

There were 582 foreclosure deeds recorded in May 2009, a 58.6 percent drop from 1,405 in May 2008 and 24.3 percent below the 769 in April 2009. Year-to-date foreclosure deeds fell 26.3 percent to 4,110 from 5,576.

“The number of foreclosure deeds recorded in May was the lowest since April 2007. It is encouraging that foreclosures have declined for two months straight. I think lenders have realized how costly foreclosures can be and are taking steps to avoid foreclosure whenever possible,” Timothy M. Warren Jr., CEO of The Warren Group, said.

“But I remain concerned because unemployment has crept up, and many people who’ve lost their jobs will have trouble keeping up with mortgage payments. In addition, it also looks like the pace of initiated foreclosures has remained fairly steady over the last four months. Lenders have started over 2,000 foreclosures a month since February,” Warren said.

A total of 2,329 foreclosure petitions were filed in May, almost six times the 390 foreclosure petitions filed in May 2008. Foreclosure petitions mark the start of the foreclosure process in Massachusetts. In addition, the number of foreclosure petitions climbed 15.7 percent from 2,013 in April 2009. There were 10,978 foreclosure petitions filed from January through May 2009, 13.7 percent lower than 12,726 last year.

“The sharp increase in May foreclosure petitions year-over-year is due to the so-called 90-day right-to-cure law that went into effect last May. The state law, which requires lenders intending to foreclose to give delinquent borrowers in Massachusetts 90 days to catch up on missed mortgage payments, artificially depressed foreclosure petitions in May 2008,” Warren said.

Auction announcements fell 30.7 percent to 1,377 in May 2009 from 1,987 in May 2008, but climbed 26.8 percent from 1,086 in April 2009. Year-to-date auction announcements dropped 34.7 percent to 5,825 from 8,916.

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Massachusetts Prices, Sales Continue Decline in May

Richard Rosa (Buyers Brokers Only, LLC) — Tue, 23 Jun 2009 09:19:08 -0500

The median price of a single-family home in Massachusetts declined 11.8 percent in May 2009 compared to the same period last year, and single-family sales dropped 15.3 percent, The Massachusetts Association of REALTORS reported June 23, 2009.

I must admit, I expected the sales numbers to be much better, either flat or slightly higher on a year-over-year basis. The decline in median price does not surprise me.

Why? Everyone I speak with is busy, including other agents, home inspectors and mortgage professionals. Sure, the mortgage people were busy with refinances, but many told that home purchases were picking up quite a bit. The median home price decline is not surprising considering that so many of the bank-owned properties are in such horrible shape. Those properties are playing a major role in dragging prices down in some communities. Most of my first-time home buyers are simply not interested in bank-owned homes

The median condo price declined 6.2 percent in May compared to May 2009. Median home prices for single-family homes and condominiums have experienced month-to-month gains for the last three and four months respectively.

There were 2,972 detached single-family homes sold this May, a 15.3 percent decrease from the 3,510 homes sold the same time last year. On a month-to-month basis, home sales were up 21.4 percent from 2,448 homes sold in April 2009.

The median selling price for single-family homes in May was $284,000, a decrease of 11.8 percent compared to $322,000 in May 2008. Despite the decrease, this is the highest median price since October 2008. In addition, the May median price is up 12 percent from the 2009 low of $252,500 in February. On a month-to-month basis, the May median selling price was up 3.3 percent from $275,000 in April 2009. This is the third straight month of month-to-month increases. The May median selling price is now back to more affordable 2003 levels.

The condominium market experienced a significant decrease of 24.6 percent in the number of units sold this May compared to the same time last year (1,640 units sold in 2008 compared to 1,236 units sold in 2009); however, on a month-to-month basis, condominium sales were up 34.9 percent compared to the 916 units sold in April 2009. May was the fourth straight month of month-to-month increases.

Condominium median selling prices in May were down 6.2 percent from $282,500 in 2008 to $265,000 in 2009; however, May's median condo price is the highest median price since August 2008. The May median price is up 30 percent from the 2009 low of $204,000 January. On a month-to-month basis, the median selling price of a condominium was up 12.3 percent from an April 2009 median price of $236,000. The May median selling price for a condominium is now back to 2005 levels.

The number of single-family homes put under agreement in May was down 5 percent compared to the same time last year (5,059 homes in 2008 to 4,802 homes in 2009). On a month-to-month basis, single-family homes put under agreement were up 7.2 percent from 4,480 homes in April. The number of condos put under agreement in May was down 6 percent compared to May 2008 (2,147 units in 2008 to 2,025 units in 2009). On a month-to-month basis, condos put under agreement were up 7.2 percent from 1,878 units in April. Pending sales or “under agreements” are homes that have a signed purchase and sale agreement, but have yet to close and be recorded.

The inventory of residential properties on the market in Massachusetts as of May 31, 2009 decreased 17 percent compared to the same time last year (from 50,537 listings in 2008 to 41,770 listings in 2009). At the current sales pace, this represents approximately 12.4 months of supply, up from 9.8 months of supply in May 2008. On a month-to-month basis, the average months of supply is up slightly from 12.1 months in April. It is considered a balanced market when there are between 7.5 and 8.5 months of supply.

The inventory of single-family homes decreased 17 percent from May 2008 (35,012 listings in 2008 to 29,210 listings in 2009). to 11.9 months of supply in May 2009.

The condominium market saw May inventory decrease by 19 percent from last year (15,525 listings in 2008 to 12,560 listings in 2009), to 13.7 months of supply in May 2009.

Detached single-family homes stayed on the market an average of 148 days in May 2009 compared to an average of 143 days in May 2008, while condos stayed on the market an average of 149 days, up from an average of 135 days in May 2008.

I question the usefulness of the data for days on the market due to the length of time it takes to close short sales. Some listing agents place the short sales "under agreement" on the MLS when an offer is accepted. Some listing agents just flag the property as having an accepted offer, thus continuing to accumulate days on the market. Other agents just keep the property "active" on the MLS until the lender approves the short sale. That can take many months.

I wonder how other agents feel about the data for average days on the market.

Court Ruling Holding Up Foreclosure Sales

Richard Rosa (Buyers Brokers Only, LLC) — Mon, 15 Jun 2009 11:34:20 -0500

A Springfield, MA Land Court judge's recent ruling has resulted in many sales of bank-owned properties being halted.

The judge ruled that due to improper paperwork two banks improperly foreclosed on two Springfield-area homes; therefore, the title to these properties is "clouded" or defective.

The decision effects the sale of many bank-owned properties in Massachusetts. It has effected one transaction of mine.

Read more about this at MassForeclosed.com.

Q1 Tewksbury, MA Sales Up, Prices Down

Richard Rosa (Buyers Brokers Only, LLC) — Mon, 15 Jun 2009 11:27:53 -0500

Tewksbury, Massachusetts recorded a gain in the number of sales of single-family homes last quarter, as compared to Q1 2008 and Q1 2007. During the first quarter of 2009, 30 homes sold. This represents an increase of 7.14 percent from the 28 sales of Q1 2008, and is 15.38 percent more than the 26 sales during the first quarter of 2007.

The median price of single-family homes in Tewksbury dropped from the first quarter last year, down from $326,000 to $307,450 in Q1 2009, and a decline of 5.69 percent. Last quarter’s median price is 15.76 percent below Q1 2006.

On average, Tewksbury single-family homes spent less days on the market than they have in the previous three years. While averaging 112 days last quarter, single-family homes averaged 134 days, or 16.42 percent more time on the market during the first quarter of 2008.

Tewksbury, MA Real Estate Market Data

Median Price Number of Sales Days on the Market

Q1 2006:        $364,950                 36                                122
Q1 2007:    $371,750              26                        153
Q1 2008:    $326,000                   28                                 134
Q1 2009:    $307,450              30                        112

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Weymouth, MA Home Sales Increase In Q1 2009

Richard Rosa (Buyers Brokers Only, LLC) — Thu, 23 Apr 2009 21:05:02 -0500

Single-family home sales in Weymouth, Massachusetts increased 45.6 percent in the first quarter compared to Q1 2008, climbing from 46 sales to 67. Sales were up from 66 in the first quarter of 2006 and down from 74 sales in the first quarter of 2007.

The median price of a single family home in Weymouth, MA remained nearly unchanged at $285,000, up just slightly from $284,950; however, the median price is down 16.1 percent from Q1 2006 ($339,950).

The average number of days on the market remained the same at 116, which was also the average number of days on the market in the first quarter of 2006.

                Median Price        Number of Sales        Days on the Market
Q1 2006:        $339,950                    66                                116
Q1 2007:        $314,750                    74                                136
Q1 2008:        $284,950                    46                                116
Q1 2009:        $285,000                    67                                116

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Haverhill, MA Home Sales Decrease In Q1 2009

Richard Rosa (Buyers Brokers Only, LLC) — Thu, 23 Apr 2009 20:54:34 -0500

Compared to the first quarter of 2006, the median price of a single-family home in Haverhill, Massachusetts declined 23.9 percent in the first three months of 2009.

Compared to the first three months of 2008 ($270,500), median price was down a modest 5.76 percent in the first quarter of 2009 ($254,900). Home sales declined from 70 in Q1 2008 to 55 in Q1 2009, a decline of 21.4 percent. Home sales rose in Haverhill in 2008.

After declining from 148 days to 132 days in 2008, the average number of days on the market for a single-family home during the first three months of 2009 rose to 173.

Median Price Number of Sales Days on the Market

Q1 2006     $335,000              85                                112
Q1 2007     $302,500              68                                148
Q1 2008     $270,500              70                                132
Q1 2009     $254,900              55                                173

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FAQ About First-time Home Buyer Federal Tax Credit

Richard Rosa (Buyers Brokers Only, LLC) — Sun, 01 Mar 2009 19:28:38 -0600

The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009.

The 2009 home buyer tax credit is much improved compared to the 2008 version.

The following questions and answers, created in part by the National Association of Home Builders, provide basic information about the tax credit. If you have more specific questions, I strongly encourage you to consult a qualified tax adviser about your unique situation. The following is for informational purposes only.

1. Who is eligible to claim the tax credit?
First-time home buyers purchasing any kind of home, new or resale, are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner.

2. What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the home ownership history of both the home buyer and his/her spouse.

For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit; however, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.

3. How is the amount of the tax credit determined?
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.

4. Are there any income limits for claiming the tax credit?
The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.

5. What is "modified adjusted gross income"?
Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (known as "adjustments" or "above-the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.

To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs.

6. If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Possibly. It depends on your income. Partial credits of less than $8,000 are available for some taxpayers whose MAGI exceeds the phaseout limits.

7. Can you give me an example of how the partial tax credit is determined?
Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.

Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.

.Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax adviser for information relating to your specific circumstances.

8. How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?
The most significant difference is that this tax credit does not have to be repaid. Because it had to be repaid, the previous "credit" was essentially an interest-free loan. This tax incentive is a true tax credit; however, home buyers must use the residence as a principal residence for at least three years or face recapture of the tax credit amount. Certain exceptions apply.

9. How do I claim the tax credit? Do I need to complete a form or application?
Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on Line 69 of their 1040 income tax return. No other applications or forms are required, and no pre-approval is necessary; however, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests.

10. What types of homes will qualify for the tax credit?
Any home that will be used as a principal residence will qualify for the credit. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. The definition of principal residence is identical to the one used to determine whether you may qualify for the $250,000 / $500,000 capital gain tax exclusion for principal residences.

11. I read that the tax credit is "refundable." What does that mean?
The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.

For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).

12. I purchased a home in early 2009 and have already filed to receive the $7,500 tax credit on my 2008 tax returns. How can I claim the new $8,000 tax credit instead?
Home buyers in this situation may file an amended 2008 tax return with a 1040X form. You should consult with a tax adviser to ensure you file this return properly.

13. Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been "purchased" on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after January 1, 2009 and before December 1, 2009.

In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.

14. Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
Yes. The tax credit can be combined with the MRB home buyer program. Note that first-time home buyers who purchased a home in 2008 may not claim the tax credit if they are participating in an MRB program.

15. I live in the District of Columbia. Can I claim both the Washington, D.C. first-time home buyer credit and this new credit?
No. You can claim only one.

16. I am not a U.S. citizen. Can I claim the tax credit?
Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519.

17. Is a tax credit the same as a tax deduction?
No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS.

A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $8,000 in income taxes. If the taxpayer receives an $8,000 deduction, the taxpayer’s tax liability would be reduced by $1,200 (15 percent of $8,000), or lowered from $8,000 to $6,800.

18. I bought a home in 2008. Do I qualify for this credit?
No, but if you purchased your first home between April 9, 2008 and January 1, 2009, you may qualify for a different tax credit.

19. Is there any way for a home buyer to access the money from the tax credit sooner than waiting to file their 2009 tax return?
Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the down payment.

Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties.

Further, rule changes made as part of the economic stimulus legislation allow home buyers to claim the tax credit and participate in a program financed by tax-exempt bonds. Some state housing finance agencies, such as the Missouri Housing Development Commission, have introduced programs that provide short-term credit acceleration loans that may be used to fund a down payment. Prospective home buyers should inquire with their state housing finance agency to determine the availability of such a program in their community.

20. If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.

Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.

21. For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.

Read another FAQ list about the tax credit created by the National Association of REALTORS®.

Also visit FederalHousingTaxCredit.com.

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Massachusetts Home Sales. Prices Plunge in January

Richard Rosa (Buyers Brokers Only, LLC) — Fri, 27 Feb 2009 11:05:57 -0600

Single-family home sales in Massachusetts dropped 10.3 percent in January while median prices plummeted by 20.2 percent compared to January 2008, The Warren Group, publisher of Banker & Tradesman, reported February 24, 2009.

The Massachusetts median home price dramatically dropped to $259,250 from $325,000 in January 2008. January marked the fifth consecutive month that single-family median home prices have been off by double-digit percentages. The $259,250 median price is the lowest it’s been since March 2002.

There were 1,908 single-family home sales in January, down from 2,126 in January 2008. It was the lowest sales volume for the month of January in the 22 years that The Warren Group has been tracking the Massachusetts residential real estate market.

Condominium sales hit a 17-year low for the month of January. There were 806 condo sales statewide in January, a 29 percent decrease from 1,136 during the same month in 2008. The median condo price fell 22.2 percent to $209,900 in January from $269,950 a year earlier.

Condo prices are finally starting to weaken after holding up much better and longer than single-family home prices.

The Massachusetts Association of REALTORS® (MAR) reported similar numbers. The MAR said that single-family home sales were down 12.5 percent in January, and the median selling price for single-family homes declined 17.9 percent compared to January 2008.

The median selling price for single-family homes in January was $263,500 compared to $321,000 in January 2008.

The MAR and The Warren Group uses slightly different methods to calculate median price and report sales.

Condominium sales were down 26 percent in January compared to the same time last year, MAR reported. The median price for a condominium was $204,000.

The MAR reported that inventory of residential properties on the market as of January 31, 2009 decreased 20 percent compared to January 2008 (from 44,540 listings in 2008 to 35,459 listings in 2009). At the current sales pace, the number of properties on the market represents approximately 15 months of supply, a decrease from 15.7 months of supply in January 2008. On a month-to-month basis, the average months of supply is up from 10.0 months in December 2008. It is considered a balanced market when there are between 7.5 and 8.5 months of supply.

The inventory of single-family homes decreased 19 percent from January 2008 (30,559 listings in 2008 to 24,822 listings in 2009). That translates into 14.3 months of supply in January 2009. Supply is down from 15.4 months last year and up from 9.6 months of supply in December 2008. January was the 10th straight month that inventory has gone down compared to the year before, and single-family home supply is at its lowest level since February 2005.

The condominium market saw January decrease by 24 percent decrease in inventory, (13,981 listings in 2008 to 10,637 listings in 2009), which translates into 16.9 months of supply, up from 16.4 months in 2008 and up from 11.3 months this past December. Condo inventory is at its second lowest level since December 2004.

Detached single-family homes stayed on the market an average of 146 days in January 2009 compared to an average of 143 days in January 2008, while condos stayed on the market an average of 179 days, up from an average of 165 days in January 2008.

Read A Boston Globe Article About January Homes Sales

Read A MAR Press Release

January 2009 Massachusetts Housing Data From MAR

Dems Feud Over Mortgage Relief Bill

Richard Rosa (Buyers Brokers Only, LLC) — Thu, 26 Feb 2009 17:22:04 -0600

Democrats in the U.S. House of Representatives disagree on legislation to let bankruptcy judges reduce the principal and interest rate on mortgages for debt-strapped homeowners, the Associated Press reported February 26, 2009.

President Barack Obama supports the measure, the most controversial part of a broader housing package that had been expected to pass the House already.

The banking industry has lobbied hard against the measure, mounting a successful multimillion-dollar effort last year to kill the legislation.

"This year, mortgage industry players who are scrambling to narrow the scope of the measure to reduce its potential cost for banks have won some key concessions. House Democrats agreed to limit the measure to existing loans made before the bill is enacted and to borrowers who can show they tried other ways of modifying their home loans before resorting to bankruptcy, among other changes."

Banks want to go much further. Banks want to restrict the bill to subprime or other exotic loans only.

"Consumer advocates and most Democrats regard the measure as crucial to slowing the rapid rate of foreclosures. They say it's the only way to force mortgage holders — known as loan servicers — to take steps to help homeowners stay in their homes."

The mortgage industry contends, however, that the measure will impose steep and unpredictable costs on its companies, which will be forced to raise fees and interest rates for borrowers.

Industry lobbyists welcome the delay, which will give them time to press for a more narrow measure.

Should bankruptcy judges have these broad powers?

Read The Associated Press Article

Obama Attacks Foreclosure Armed With $75 Billion

Richard Rosa (Buyers Brokers Only, LLC) — Wed, 18 Feb 2009 15:45:57 -0600

President Obama announced in Phoenix February 18, 2009 a $75 billion plan, backed by taxpayer money, to prevent foreclosures across the U.S.

One part of the foreclosure prevention plan will ease refinancing for people who owe more on their mortgages than their homes are currently worth. Another part of the plan provides incentives for mortgage lenders to help those on the verge of foreclosure.

Will this help the real estate market or just provide banks with more pork?

The following video, courtesy of New England Cable News, is about 11 minutes long.

Acton, MA Real Estate Market Data

Richard Rosa (Buyers Brokers Only, LLC) — Fri, 06 Feb 2009 16:04:38 -0600

The median price of a single-family home in Acton, MA rose 0.75 percent in 2008 compared to 2007, rising from $549,900 to $554,053.

The median home price in 2005 was $614,116.

Home sales in Acton, MA declined 10.1 percent in 2008, falling from 167 sales in 2007 to 150 sales. Single-family home sales are off 26.8 percent compared to the 205 sales in 2005.

The average number of days on the market declined 24.8 percent in 2008, falling from 121 days in 2007 to 91 days.

The data comes from MLS Property Information Network, Inc., the multiple listing service used by local real estate professionals.

Acton, Massachusetts
Single-family Market Data
Jan. 1st through Dec. 31st

Year    No. of Sales
2005        205
2006        183
2007        167
2008        150

Year    Median Price
2005        $614,116
2006        $567,500
2007        $549,900
2008        $554,053

Year    DOM
2005       82
2006       96
2007       121
2008       91

Check out the latest single-family home listings in Acton, MA.

2009 Massachusetts Real Estate Survey

Richard Rosa (Buyers Brokers Only, LLC) — Fri, 06 Feb 2009 15:55:08 -0600

Where do you think the real estate market in Massachusetts is headed?

Give me your thoughts. Take a five-minute survey. Thank you!

Buy Now Or Wait For Better Deals?

Richard Rosa (Buyers Brokers Only, LLC) — Fri, 06 Feb 2009 15:50:39 -0600

I received the following in an email from a Beverly, MA real estate agent today.

“Some people say they want to wait for a clearer view of the future. But when the future is again clear, the present bargains will have vanished. In fact, does anyone think that today’s prices will prevail once full confidence has been restored?”

That comment was made 77 years ago by Dean Witter in May of 1932 – only a few weeks before the end of the worst bear market in history. History continues to provide us valuable lessons for the future, if we are willing to listen.

What do you think?

NAR Supports Changes To HOPE Program

Richard Rosa (Buyers Brokers Only, LLC) — Thu, 05 Feb 2009 21:32:55 -0600

The National Association of Realtors® (NAR) announced its support February 3, 2009 for new legislation introduced by House Financial Services Committee Chairman Barney Frank, D-Mass., that is designed to ease loan modifications and improve refinancing options for homeowners facing foreclosure by revamping the HOPE for Homeowners program.

The legislation, H.R. 703, is expected to make the program more lender-friendly, while preserving the benefits to homeowners. It would also limit risks to the FHA fund and to the American taxpayer.

The legislation would also provide access to Troubled Asset Relief Program funds for small institutions and community banks and encourage additional actions to expand mortgage funding capacity in the primary market.

NAR also continues its push to enact legislation that will help stabilize and stimulate the housing market. Its four-point plan, introduced in November, is designed to spur home sales and stem the rapid rise in foreclosures by lowering mortgage interest rates and unclogging the credit market, extending the home buyer tax credit, making the increased loan limits permanent, and increasing liquidity in the both the commercial and residential real estate market.

National Public Radio reported February 3, 2009 that the HOPE program has gone largely unused.

Haverhill, MA Home Sales Increase

Richard Rosa (Buyers Brokers Only, LLC) — Thu, 05 Feb 2009 21:29:54 -0600

Single-family home sales in Haverhill, MA rose 1.47 percent in 2008 compared to 2007, from 338 to 343 sales; however, the median single-family home price declined 11.2 percent in 2008 compared to 2007, falling from $300,000 to $269,900.

The data comes from MLS Property Information Network, Inc., the multiple listing service used by local real estate professionals.

Haverhill, Massachusetts
Single-family Market Data
Jan. 1st through Dec. 31st

Year    No. of Sales
2005        473
2006        395
2007        338
2008        343

Year    Median Price
2005      $330,000
2006      $320,900
2007      $300,000
2008      $269,900

Year    DOM
2005      86
2006      117
2007      130
2008      145

Check out the latest Haverhill, Massachusetts single-family home listings.

Essex, Middlesex Counties See Steep Price Declines

Richard Rosa (Buyers Brokers Only, LLC) — Wed, 04 Feb 2009 09:48:16 -0600

Essex County saw it's median single-family home price decline 10.6 percent in 2008, and single-family home prices in Middlesex County declined 8.4 percent compared to 2007, The Boston Globe reported February 1, 2009.

The Globe obtained the data from The Warren Group, a publisher of real estate data.

Single-family home sales declined 9.9 percent in Essex County and 12.7 percent in Middlesex County.

"Cities with high foreclosure rates posted the largest price drops, even as sales improved in some places. In Lynn, home sales last year increased 9.8 percent, but the median price dropped 20.4 percent to $206,000. Haverhill, which had a 1.5 percent sales gain, posted a 13.6 percent price drop, to $259,000."

The data also showed that Everett's sales jumped 17.4 percent in 2008, but prices declined 17 percent. Revere's home sales spiked 24.6 percent, but prices tumbled 19.1 percent.

For more real estate market data around Massachusetts, visit the Massachusetts Home Buyer Guide.

Pending Home Sales Up

Richard Rosa (Buyers Brokers Only, LLC) — Wed, 04 Feb 2009 09:41:03 -0600

Pending home sales in the United States increased 6.3 percent in December compared to November 2008, USA Today reported February 3, 2009.

Pending sales also were up 2.1 percent compared to December 2007. The data comes from the National Association of REALTORS® (NAR). The NAR attributes the gains to more affordable homes.

Pending sale slipped 1.7 percent in the Northeast compared to November.

The NAR's pending sales index tracks signed contracts to purchase existing homes. Typically there is a one- to two-month lag between a contract and a done deal. Home sales that were pending in December likely will close in the coming weeks.

U.S. existing home sales also increased in December.

On the other hand, U.S. new home sales declined dramatically in 2008.

Read The USA Today Article

Read The NAR Press Release

MA Foreclosure Deeds Rise; Foreclosure Petitions Decline

Richard Rosa (Buyers Brokers Only, LLC) — Tue, 27 Jan 2009 20:30:22 -0600

Foreclosure activity in Massachusetts surged 62.4 percent in 2008 compared to 2007 and was nearly four times the level seen in 2006, The Warren Group, a publisher of real estate data, reported January 21, 2009; however, foreclosure petitions, the first step in the foreclosure process, ended the year below the level reported in 2007.

A total of 12,430 foreclosure deeds were recorded last year, up from 7,653 in 2007 and 3,130 in 2006. In December, there were 936 foreclosure deeds, a 5.4 percent increase from November’s 888 deeds and 37 percent increase from the 683 deeds in December 2007.

December marked the fourth consecutive month in 2008 that foreclosure deeds fell under 1,000. The bulk of the foreclosures, nearly 60 percent, occurred from March through August, when more than 1,000 foreclosure deeds were recorded each month.

Lenders filed 21,804 foreclosure petitions in 2008, down 26.3 percent from 2007 when there were 29,572 foreclosure petitions. The drop-off is linked to a law that went into effect last year that requires lenders wanting to initiate a foreclosure to give delinquent borrowers 90 days to pay off mortgage loan defaults. During the month of December, foreclosure petitions jumped 21.7 percent to 1,625 from 1,335 in November, but were 40.4 percent lower than the 2,724 petitions filed during the same month in 2007. Lenders filed more than half of the year’s petitions during the first four months of 2008.

The silver lining in the data is that there weren’t as many people entering the foreclosure process in 2008 as there were in 2007. In early 2008, lenders were filing an average of 3,000 petitions to foreclose each month. Toward the end of the year, that number fell to below 2,000. Of course, there is no good news for the more than 12,000 people who lost their home.

The Warren Group also tracked 19,270 auction announcements in 2008, a 32.5 percent increase from 14,546 in 2007, and 189.4 percent higher than the 6,659 auction announcements reported in 2006. Auction announcements in December climbed 6.3 percent to 1,206 from 1,134 in November and 11.6 percent from 1,081 during the same month a year earlier.

Loan Modifications May Become Mandatory In MA

Richard Rosa (Buyers Brokers Only, LLC) — Tue, 27 Jan 2009 20:21:00 -0600

Legislation filed in Massachusetts would require lenders to modify home loans in certain circumstances, the Boston Business Journal reported January 27, 2009.

The legislation named, An Act to Require Commercially Reasonable Efforts to Avoid Foreclosure, was filed by Massachusetts Attorney General Martha Coakley, with Senator Susan Tucker and Representative Steven Walsh, would mandate loan modifications in certain circumstances.

Specifically, the legislation requires that creditors make "commercially reasonable efforts" to avoid foreclosure upon mortgage loans securing homes that are owner-occupied. This would apply only to loans on principal residences, and to loans with certain risky features, such as interest-only loans, adjustable rate mortgages, and loans with short-term, introductory interest rates. The legislation also provides a "safe harbor" for creditors to comply with this requirement of commercial reasonableness.

A violation of this legislation will constitute a violation of Massachusetts General Law Chapter 93A, which is the Massachusetts Consumer Protection Act.

This really is an amazing piece of legislation. State government is now forcing private businesses to operate their business a certain way and mandating those business to make certain business decisions.

Foreclosure Listings Absolutely Free

Read The Boston Business Journal Article

Read Attorney General Coakley's Press Release

Summary of the Legislation Filed

Full Text of the Legislation Filed

More Than 100 MA Properties To Be Sold At Auction

Richard Rosa (Buyers Brokers Only, LLC) — Mon, 26 Jan 2009 10:02:47 -0600

The Boston Herald reported January 25, 2009 that a Dallas-based auctioneer, Hudson & Marshall, will auction off more than 100 bank-owned Massachusetts properties at the Boston Quincy Marriott Saturday January 31, 2009.

Another 28 Western Massachusetts properties will be sold January 27, 2009 at the Sheraton in Springfield, MA.

Successful bidders must make a $5,000 deposit in cash, cashier’s check or certified funds for each property. All properties are sold "as is." I don't recommend these auctions for first-time home buyers.

"Evelyn Friedman, director of [Boston's] Department of Neighborhood Development, warned that some properties sold at such massive auctions have title problems."

Read my previous post about some other multi-property auctions in Massachusetts over the last 18 months. Some successful bidders may still be waiting to move in.

Read The Boston Herald Article

New Regulations For Home Appraisers

Richard Rosa (Buyers Brokers Only, LLC) — Tue, 20 Jan 2009 19:07:27 -0600

Federal and state regulators announced an agreement to regulate home appraisal practices as part of an agreement with mortgage finance companies Fannie Mae and Freddie Mac, the Everett, Washington Herald reported January 4, 2009.

Many complaints of problems with inflated appraisals and their impact on the nation's housing market led New York Attorney General Andrew Cuomo to reach an initial pact in March 2008 with Fannie Mae and Freddie Mac on a plan to try to reform the industry.

The original changes, however, brought complaints from bank regulators and mortgage industry officials, who said Cuomo was overstepping his authority and said the law would harm the mortgage industry.

Fannie Mae and Freddie Mac, federal government-controlled companies, own or guarantee the majority new U.S. home loans and have become more dominant in the mortgage industry since the collapse of dozens of lenders that catered to borrowers with poor credit. Any changes made by the two companies affect the entire lending industry.

The new agreement is effective May 1 and requires appraisers to abide by a six-page code of conduct that includes new rules for appraisers who work for the same companies as lenders. A prior version of the agreement banned "in-house" appraisals, but that apparently was excluded from the final pact.

Read The Everett, Washington Herald Article

U.S. Foreclosures Increase 81 Percent

Richard Rosa (Buyers Brokers Only, LLC) — Tue, 20 Jan 2009 19:01:15 -0600

RealtyTrac reported that there were more than three million various foreclosure filings (default notices, auction sale notices and bank repossessions) in 2008 on 2,330,483 U.S. properties, an 81 percent increase in total properties from 2007 and a 225 percent increase in total properties from 2006.

The report also shows that 1.84 percent of all U.S. housing units (one in 54) received at least one foreclosure filing during the year, up from 1.03 percent in 2007.

Foreclosure filings were reported on 303,410 U.S. properties in December, up 17 percent from the previous month and up nearly 41 percent from December 2007. Despite the spike in December, foreclosure activity for the fourth quarter was down nearly 4 percent from the previous quarter, but still up nearly 40 percent from the fourth quarter of 2007.

“State legislation that slowed down the onset of new foreclosure activity clearly had an effect on fourth quarter numbers overall, but that effect appears to have worn off by December,” said James J. Saccacio, chief executive officer of RealtyTrac. “The big jump in December foreclosure activity was somewhat surprising given the [moratorium] enacted by both Freddie Mac and Fannie Mae, along with programs from some of the major lenders and loan servicers aimed at delaying foreclosure actions against distressed homeowners.

“Clearly the foreclosure prevention programs implemented to-date have not had any real success in slowing down this foreclosure tsunami. And the recent California law, much like its predecessors in Massachusetts and Maryland, appears to have done little more than delay the inevitable foreclosure proceedings for thousands of homeowners.”

Nevada, Florida, Arizona post top state foreclosure rates in 2008

More than 7 percent of Nevada housing units (one in 14) received at least one foreclosure notice in 2008, giving it the nation’s highest state foreclosure rate for the year. A total of 77,693 Nevada properties received a foreclosure filing during the year, an increase of nearly 126 percent from 2007 and an increase of nearly 530 percent from 2006.

Florida registered the nation’s second highest state foreclosure rate in 2008, with 4.52 percent of its housing units (one in 22) receiving at least one foreclosure filing during the year, and Arizona registered the nation’s third highest state foreclosure rate, with 4.49 percent of its housing units (one in 22) receiving at least one foreclosure filing during the year.

Other states with Top 10 foreclosure rates for 2008 were California, Colorado, Michigan, Ohio, Georgia, Illinois and New Jersey.

California, Florida, Arizona post highest 2008 foreclosure totals

A total of 523,624 California properties received a foreclosure filing in 2008, the nation’s highest state total. Foreclosure activity in the state increased nearly 110 percent from 2007 and nearly 498 percent from 2006.

With 385,309 properties receiving a foreclosure filing in 2008, Florida documented the second highest state total. Florida foreclosure activity increased 133 percent from 2007 and nearly 412 percent from 2006.

Arizona’s 2008 total of 116,911 properties receiving a foreclosure filing was third highest among the states. Foreclosure activity in Arizona increased 203 percent from 2007 and 655 percent from 2006.

Other states with Top 10 totals for 2008 were Ohio, Michigan, Illinois, Texas, Georgia, Nevada and New Jersey.

Click here to receive Massachusetts foreclosure listings absolutely free.

Dorchestor, MA Mortgage Broker Pleds Guilty

Richard Rosa (Buyers Brokers Only, LLC) — Tue, 20 Jan 2009 18:57:24 -0600

A Dorchester, MA mortgage broker who helped home buyers who were credit risks secure subprime loans has pleaded guilty to forgery, larceny, and other criminal charges, the Massachusetts Attorney General's office reported January 13, 2009.

Nicole Lyder, age 34, pled guilty to charges of forgery (6 counts), larceny of bank credit by false pretenses (5 counts), uttering a false document (6 counts), and making or publishing false or exaggerated statements (4 counts).

Following the change of plea to guilty, Suffolk Superior Court Judge Christine McEvoy sentenced Lyder to serve two years in the house of correction, committed, and two years in the house of correction, sentence suspended for three years and to begin from and after the committed time. Essentially, Lyder will be on probation for three years from the time she is released from jail.

Lyder was held for 285 days awaiting trial because she couldn't make bail, and now that she has pleaded guilty, she will be eligible for parole in approximately three months.

The government's investigation focused on mortgage loans that Lyder assisted home buyers in securing from Fremont Investment & Loan, Inc. The Massachusetts Attorney General's office sued the California company in 2007, alleging predatory lending practices. That case is still pending and the company denies the allegations.

In addition to her misconduct with respect to these subprime mortgages, Lyder also engaged in fraudulent activity in order to secure an automobile loan for a $63,000 Landrover that she purchased. In July 2007, Lyder submitted fraudulent bank statements to Sovereign Bank in order to secure financing for the vehicle by altering a bank statement belonging to one of her former mortgage clients, making it appear as if it were her own bank statement.

According to The Boston Globe, among Lyder's clients, one left a homeless shelter and two others gave up government-subsidized housing to buy homes. No word whether these home buyers will be prosecuted for their roles in obtaining these fraudulent loans. The clients later realized they could not afford their monthly payments and eventually had foreclosure cases brought against them.

Read The Massachusetts Attorney General's Office Press Release