The brick two-family home on a tight lot had been bought by its owners near the peak of the real-estate bubble in 2005 for $645,000. As the market crashed and the owners found themselves owing far more on their mortgage than the home was now worth, and potentially facing foreclosure, they persuaded their bank to agree to a "short sale," where the bank stands to get a chance to recoup a big chunk of what it's lent the owner quickly, without having to go through the arduous paper trail of a foreclosure followed by a resale that could take months or years.
LaMacchia, of McGeough LaMacchia Realty Inc. of Waltham, Mass., persuaded the bank to go to market asking $489,000. "We put it on at the best price, that we thought was right,'' LaMacchia said. But then? "After about three or four weeks it didn't sell, so we brought the price down.'' All the way to $442,000, more than $200,000 below what It had sold for six years earlier. With that, the house was sold in less than a month.
While it's not a situation the owners or their bank can feel great about, the sale of the Lexington Street duplex does represent a success to celebrate, because new data released Tuesday by The Warren Group -- publishers of authoritative industry data bible Banker & Tradesman -- show home sales were way down in Massachusetts in May. For single-family homes, sales were down 25 percent from a year earlier, condos off 38 percent. For the year to date, 19 percent fewer homes of all sizes have moved than did in the same period in 2010.
It's tricky on one level to compare this May to last May because back then, sales were being juiced by the $8,000 tax credit for first-time homebuyers. But back then, it was hoped that credit would just be a short-term stimulus to prop up the market, and by now, sales and values would have begun to rebound. What the longer-term data suggest is that the market remains deeply troubled.
"Unfortunately,'' said group publisher Vincent Michael Valvo at The Warren Group, "I can't give a positive prediction out through the rest of the year. I actually think we're in shape to finish the rest of the year in terms of housing sales as probably one of the worst years we've had in the last decade ... This is not going to be a very good year for home sellers.''Besides the end of the first-time homebuyers' tax credit, which inflated demand and accelerated some sales, other factors chilling the market now include high national unemployment, weak consumer confidence, and much tougher standards for mortgage lending. Banks and mortgage lenders that five or six years ago were throwing money at homebuyers, even through no-documentation "liars' loans," have come under intense pressure from regulators to dramatically tighten underwriting standards and require bigger down payments.
"You have to go through a lot more hoops to get the mortgage these days,'' Valvo said, "so that has had a bit of an effect.''
What's the lesson if you're selling a home? LaMacchia, as you would expect, says it's crucial to use a professional Realtor if you're buying or selling now. Whereas anyone could make money buying or selling a house five or six or seven years ago when the housing market was in full mania, now it's critical to pick the right price and presentation for your home or condo. (LaMacchia has also emerged as one of Greater Boston's leading specialists in short sales, having achieved more than 160 in recent months.)
And in this market, price is especially critical.
"Price it right. Don't get caught up in trying to get the extra dollar or trying to outdo your neighbor,'' LaMacchia said. "Price it right from the beginning. Try to sell it as soon as possible. Homes sell for the most money when they're sold in the first month. It's a mistake that a lot of home sellers make: They say, 'Give it more time.' 'Let's wait longer.' 'The house up the street sold for more.' 'Mine's better than the one up the street.' You can't do that. At the end of the day, the market tells you what the house is worth.''
Source http://www.necn.com/
No comments:
Post a Comment