MA Market - Middlesex County

[Nick Noon]

Hey all Boston-based BP'ers. 

I was wondering if anyone has any idea of what the outlook on the market is in the Boston area.  I realize that is a broad question, so let me get more specific.

I am a first time home-buyer looking to buy a multi-family property I can house-hack.  I work in Newton so I am looking for a multi in the Middlesex county, or possibly the Norfolk county if there is a deal there and it's closer to Newton.  

I will have about $12,000 saved up around the 1st of the year and thats when I plan on buying a property....hopefully have a P&S signed by March. I have been preapproved for loan by my mortgage lender and am looking to do the FHA 203k loan. I have been tracking houses on the MLS in the Middlesex County, as well has homepath.com and homesteps.com for a few months now and I am really not seeing a lot of inventory out there.

Does anyone think that there will be more inventory in the March time frame?  Will interest rates stay the same?  I feel like right now everyone is overpaying for everything and it seems to be a heavy "seller's market".

Any insight would be much appreciated as it will help prepare myself for when I buy house early next year.  Once I buy that one I would be looking to Cash out refinance to buy another property.  

[Shaun Reilly]

I think that is a pretty good plan Nick.

I will say though that is you only have $12K to work with even with a minimal FHA down payment you are topping out in the $340s which isn't going to go very far any place close to Newton (and in Newton you are talking small 2BR condo not a multifamily at that price level).

How is your commute?  Is getting closer to work one of the major impetuses to move?  If you don't mind the drive now you can get a lot more options up in the Merrimack Valley and still get good rents and good appreciation.  

As Robbie I have been sharing some main stream stuff showing the market isn't as hot as people say.  I honestly think we are going to hit a market correction sooner rather than later.

If you do check out my FB page see the one I posted today from the Globe that says since last year more houses are taking price cuts before selling and more sales are falling through (presumably as buyers realize that paying 10% over list with no contingencies is kinda dumb).  

Then check out one from Zillow at the end of last month, I think like 7/28 maybe, that was actually about how people are underestimating the amount their houses are appreciating.  However the section about Boston says that prices are basically flat since last year and that 64% of people over estimated the level of appreciation. 

https://www.facebook.com/pages/Masshomesalecom/142...

There is also a video I did the other day discussing the foreclosure stats and what it means for the market.  There is an issue on my site right now so the post isn't working right now if you click on it, but hope that is fixed tomorrow.

Also do a foreclosure report that I should publish tonight but since I have the website issue hope to publish that tomorrow.  But the gist is that petitions in MA have been up for 16 straight months from the previous year.  Since it takes forever to foreclose here the first of those are just getting through the system and we are seeing a big increase in recorded foreclosure deeds the last few months.  Banks might hold back inventory but they can't just sit on all of it so I think more will come to market and it will push the already stagnating prices down a little.

Anyway I have been taking the firm position for a while that the market is not as "hot" as people say.  While in the not to distant past prices were rising fast and inventory was tight enough that people were getting screwed by not going in super strong.  Now that is more just hype and people are doing it based on irrational exuberance rather than the facts.  It might take longer but I could see there getting to be a glut of inventory this winter and that could put a damper on the spring market which could lead to a longer term price correction.  Might take longer, but if rates go up too it is that much more likely.  

As for rate hikes I don't see anything amazing coming.  I guess it comes down to if Yellen is a democrat or republican.  If she is a democrat rates won't go up since the economy is a house of cards mostly being propped up by the unnaturally low rates and any real increase could bomb the economy.  If she is a republican then maybe she will jack them up a bit and kill the economy and keep them a little to high a little to long to make sure there is no chance that it will recover until after the election even if they bring rates back down...

I'm not cynical or anything...  ;p

I am in West Newton and grew up in Dracut and own properties in Lowell so I know the market here and where you are now.  If you would like to meet up and talk sometime at lunch or after work to talk about the market and your options I'd be happy to.