Highlights from the Boston Real Estate Now blog.
Cash buyers are king in this market.
And that’s putting the squeeze on ordinary buyers looking to do something really retro, like paying for a house with a mortgage. Imagine that.
In fact, 40 percent of all condo sales in Massachusetts were all cash deals in April, while a quarter of all home sales also did not involve a mortgage.
So says US News & World Report in a story that cites data from the Warren Group, which tracks real estate data.
So how do you compete?
The US News piece, citing an Atlanta broker, offers some unconventional advice: Go after “overpriced” listings.
Well yes, advises one of our country’s major news magazines. Cash buyers are looking for deals, so if you are looking to buy with a mortgage, homes that are sitting idle because their listing prices are too lofty might actually be a better bet!
Get in and then try and negotiate downward, the piece advises.
OK, well good luck with that.
I don’t know about you, but it suddenly feels like we are seeing the return of the kind of rah-rah advice that got so many buyers into trouble.
Does that mean you should never raise your bid in order to snag the right house? Of course not.
But your first priority should be finding a home you can afford long term. Before you start hitting open houses and getting excited, you first need to figure out a price range you can truly afford.
Be true to your finances, not to your inner real estate yearnings.
Prices and rents may be rising, but the real estate recovery still has a long way to go.
More than 2.4 million homeowners and renters have gone missing, either living at home with mom and dad or double-bunking with other relatives, friends, or roommates, Trulia reports.
That’s down from 2.6 million in 2009, at the height of the Great Recession.
Of course, one obvious reason that so many Millennials are still living at home is a stinky job market. Back during the good old days of 2007, 71 percent of adults ages 18 to 34 were employed.
That dropped to a low of 65 percent two years ago, bouncing back up to 66.8 percent today.
Moreover, the real estate market recovery, such as it is, may actually be making it harder for junior to move out.
Rents are rising right alongside home prices, with the Zillow rent index for the Boston area having jumped 4.8 percent June to just under $2,000.
Leading the way were neighborhoods that are typically launching pads for twentysomethings, such as Brighton, which saw an 11.6 percent jump in rents this June compared with a year ago.
But look on the bright side — if you are still living at home, at least you are not stuck with an underwater mortgage.
First-time buyers were on top back during the real estate crash, courted by desperate sellers looking for someone, anyone, to make an offer.
With no house to sell in a depressed market, first-timers were free to peruse the listings at their leisure and haggle for the best price. Ah, those were the days.
But with prices mounting rapidly, first-time buyers are finding themselves shoved rudely to the sidelines.
We are now in a seller’s market, and suddenly cash, equity, and big down payments are the order of the day.
And suddenly, first-timer buyers — and anyone without a substantial down payment — are finding themselves being dismissed as lightweights.
“Anyone who has (just) 5 to 10 percent down, they have gotten creamed,” Sam Schneiderman, president of the Massachusetts Association of Buyer Agents, told me. “People don’t even look at those offers realistically.”
Of course, the winners in this power shift are the mover-uppers. They were close to becoming an extinct species back during the bad days, unable to sell their homes and passed over by sellers.
But now some mover-uppers are finding they can not only sell, but also get a decent enough price to put a substantial sum down as well.
That’s putting the squeeze on the first-timers, who have seen their share of the market drop from a high of 50 percent in 2009 down to 30 percent today, The Wall Street Journal reports.