Anthony Lamacchia on Pricing Your Home in Today’s Market
The housing slump continues in Massachusetts. Home sales plunged last month and prices are down.
So is this a sign of things to come? And what’s a homeowner really to do? Business reporter Peter Howe joins us with a closer look. Peter, I mean it’s hard not to be depressed by these latest comparisons.
No, and I got to warn you Latoya, I’m not going to make you a whole lot happier in the next two minutes. Now, of course you do have to be a little careful comparing this market to a year ago because this time last year the first time home buyer tax credit was in full swing. But, back then it was widely hoped that that credit would just be a short term stimulus, and by now the real estate market would have fully recovered. But the reality is, sales remain deeply depressed and really don’t show signs of improving this year.
Here in Watertown, Massachusetts, Anthony Lamacchia recently accomplished something that’s tougher and tougher for New England realtors these days.
Anthony- “We sold this property in about a month.”
The owners had bought the two-family at the worst of the bubble in 2005 – $645,000. Now facing foreclosure, they agreed to a short sale at just $489,000.
Anthony- “We put it on at the best price that we thought was right. And after about 3 or 4 weeks it didn’t sell, so we brought the price down.”
By cutting another $50,000, Lamacchia landed a buyer. It’s a success to celebrate because new data from realty experts, the Warren Group, show May home sales were down 25% in Massachusetts from last year, condos off 38%. Year to date, 19% fewer homes are selling.
Unfortunately I can’t give a positive prediction for the rest of the year. I actually think we’re in shape right now to finish the year, in terms of housing sales, as probably one of the worst years we’ve had in almost the last decade.
Last spring, of course, sales were being juiced by the $8000 tax credit for first time buyers. Besides the end of the first time home buyer tax credit, another big factor chilling the market experts say, mortgages. Much harder to get them these days. Banks used to throw money at borrowers five years ago. No doc liar loans have tightened up lending standards dramatically in the last year.
You have to go through a lot more hoops to get the mortgage these days. So that has had a bit of an effect.
The lesson if you are selling a home?
Anthony- “Price it right. Don’t get caught up in trying to getting the extra dollar or trying to outdo your neighbor. Price it right from the beginning and try to sell it as soon as possible. Homes sell for the most money when they’re sold in the first month.”
Now, after all that, one small bright spot. Sales prices in Massachusetts in May were up, a little over 3%. Highest average prices that we’ve seen since August 2010. With that said, Vincent Valvo from Banker and Tradesman, the Warren Group, and other experts think that May increase is probably just a one month fluke and for the long term, as long as the number of homes selling stays so far down, prices are probably going to go down with them as well. Latoya.
It can’t be all bad news Peter, I won’t believe it. Any geographical trends, places where homes are selling better than others?
Well, you know, that it is a good point. It’s definitely still very tough in Massachusetts, in Brockton, Peabody, Lowell, some of the depressed order cities. But there certainly are some upscale markets, upscale communities with great schools like Brookline, in Massachusetts, Duxbury and Hingham on the South Shore. Those are doing really well in May compared to a year ago. Both sales and prices up. There is a reason you’ve heard the phrase a million times. Location, location, location.
Alright, Peter Howe thank you.[/toggle_content]