The housing market begins it’s comeback…
You can hear it whenever you talk to someone in real estate, be it an attorney, a broker or a developer. It’s generally a tentative question, asked softly so as to not be absolutely committal if the answer is, “No! Are you crazy?” But more and more, and ever so much more since the economic meltdown of 2008, the question receives an affirmative, unequivocal response from whomever the question is posed.
The question: “Things are getting better, right?”
Yes, they are getting better and in real estate, it’s starting to translate into a rebirth of the for-sale housing market (as previously predicted). It’s no secret that multifamily apartment development has been the only housing game in town, largely due to the availability of financing for that product coupled with a large market of renters who either can’t get a mortgage or are too uncertain about the future of for-sale housing. While there are still issues with the former, that impediment to home ownership is about to subside as more and more potential renters determine that they can own for what they’re paying to rent AND that housing prices have stabilized.
No less an authority than The Wall Street Journal, amid all of the worldwide financial turmoil, has been running stories that speak to the fact that, “Things are getting better, right?” On May 29th, the WSJ ran a headline noting that, “Housing Prices Show Signs of Stability” under the oft prescient by-line “Ahead Of The Tape.”
Citing the S&P/Case Shiller index of home prices regarding increased affordability and CoreLogic’s national home price index which indicates that
pricing has risen in recent months at the fasted pace since the bubble spring of 2006,
the article’s conclusion was one of optimism. While not predicting a boom such as we witnessed before the last housing downturn, it’s clear that prices are stabilizing, if not rising.
The very next day, on May 30th, The Wall Street Journal ran a sub-head that stated, “Home Prices Barely Declined From February to March, Stirring Hope for Recovery,” and the message of the article was of “fresh evidence of a real-estate market on the mend.” To me, the articles in the WSJ are interesting, especially in a political year. No friend of the current administration, things might actually be better than reported in the WSJ, a conservative organ that would likely prefer to run articles that substantiate the need for a change in Washington.
So let’s take a look at the local scene…
On May 22, The Boston Globe ran an article by Chris Ready under the heading, “Mass. Median home prices rise.” The article noted, among other things, the welcome news that single-family home prices were up 2.7% from a year ago and, even more significant,
this is the first increase in median home prices since September 2011, when the increase was less than half of one percent.
Interestingly, this Boston Globe article, emanating from an acknowledged liberal paper, used the exact same theme and wording (“a market on the mend”) as the similarly acknowledged conservative WSJ.
A common thread among the The Wall Street Journal articles and this particular Boston Globe article was voiced by Massachusetts Association of Realtors President Trisha McCarthy:
The increased activity we’ve been experiencing over the past several months, which has included multiple bid situations, is pushing prices up. Hopefully, people who want to sell but have been holding back will decide now is a good time to put their homes on the market.
Underscoring that sentiment, Timothy M Warren Jr., the President of The Warren Group which is probably the most cited authority on housing trends in the region said,
Low mortgage rates and an improving job market in the Bay State are encouraging buyers to enter the market.”
However, and nearer and dearer to my own heart…
The Boston Globe article noted another statistic from the Massachusetts Association of Realtors:
As for Massachusetts condominiums (my italics for emphasis), the sales volume was up 10.2 percent in April, from 1,213 units sold in 2011 to 1.337 units sold in 2012.
With so many multifamily apartment buildings either on the drawing boards or in construction, are current and potential renters finally going to realize the for-sale prices have stabilized that the math dictates that it’s time to buy instead of renting?
Damn, I hope so…This month, Charing Cross in Brighton, one of the first large-scale condominium developments in years, will be appearing before the Boston Zoning Board of Appeals with the hope of obtaining one of the last entitlements necessary to begin construction of this signature piece of architecture. With 55 units, all with deeded garaged parking, private exterior space, and extraordinary views of downtown Boston, Charing Cross will provide the first evidence that the housing market and, specifically, the condominium market, has begun its comeback.
And when you reflect on all of the above, you have to ask yourself, “Things are getting better, right?”