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Boston real estate now | Scott Van Voorhis

Renter Nation increasingly cash-strapped

Highlights from the Boston Real Estate Now blog.

Home buyers and owners have certainly faced their share of misery over the past decade.

And the return of escalating home prices is fast undoing any minor increase in affordability created after the real estate market tanked back in 2008.

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But all is not well in Renter Nation either.

No, it’s not the happy land of footloose and fancy free millennial types we have all been hearing about, who are choosing to rent because it fits their evolving, earth-friendly lifestyles.

Rather, renters across the country are increasingly finding themselves cash strapped, having to devote ever greater amounts of shrinking or stagnant paychecks just to keep a roof over their heads.

So says the Harvard Joint Center on Housing Studies in a new report.

Adjusted for inflation, rents nationally have risen by 6 percent over the past decade. Meanwhile, renters have seen their incomes plunge during the same period by 13 percent, the study finds.

“The gravity of the situation for the large proportion of renters spending so much of their incomes on housing is plain,” said Eric Belsky, managing director of the Joint Center for Housing Studies at Harvard, in a statement. “We are losing ground rapidly against a chronic problem that forces households to cut essential spending.”

More than half of all renters across the country now shell out more than 30 percent of their income to their landlords, thrusting them into the land of the so-called rent burdened.

That’s up from 38 percent back at the start of the 2000s.

Second, 27 percent of all apartment dwellers are shoveling more than half their pay into their monthly rent checks, up from less than 20 percent a decade before.

For low-income renters, the only way to make ends meet is to cut back on other essentials, such as groceries.

The good news is that the market is responding, with builders starting to put up new apartment buildings and larger developments across the country.

Yet we are dealing with a growing long-term problem. While more apartments will help, it’s not going to solve the affordability problem overnight.

Shopping for a home at the holidays

If you are looking for a deal on a house, better get moving. The next month or two is probably going to be your best chance for the next year.

Why? Well the holiday season is here. And sellers still looking for buyers at this time of year are more likely to cut prices and move on.

Just think about it. If you are trying to sell your house between Thanksgiving and Christmas, you clearly aren’t messing around. That is unless your idea of fun is having home buyers pop up on your doorstep the day after Christmas.

In fact, you can buy a home at a significant discount in some of the most coveted suburbs , with a growing number of sellers in some towns slashing prices by 5 percent or more.

Bill Wendel over at the Real Estate Cafe has put together some incredible numbers showing a flurry of holiday season price cutting taking place right now in Burlington, Bedford, Carlisle, Lexington, Westford, and Winchester.

Roughly 8 percent of the homes that have been put under agreement — meaning a purchase and sales contract has been inked but the sale hasn’t formally closed yet — have seen substantial price cuts of 5 percent or more. That includes the seller of one Winchester manse who slashed his asking price by 15 percent, down to $1.7 million, and a Westford seller who snagged a buyer for his now $709,000 home after shaving off $76,000, according to MLS numbers examined by Wendel.

But in a sign of holiday price slashing, the freshest sales out there — those awaiting home inspections or the signing of a purchase and sales agreement — are sporting even deeper discounts.

The median listing price of these homes has dropped by 10 percent, to $630,000, according to Wendel. Roughly a third of 33 homes in this category — classified as “contingent” by MLS — have seen their owners reduce their asking prices by anywhere from 5 percent to more than 18 percent.

Burlington and Lexington are leading the way, with sellers of six homes in these upscale suburbs having cut prices by anywhere from $40,000 to more than $100,000.

Scott Van Voorhis is a freelance writer who specializes in real estate. For the full Boston Real Estate Now blog, visit www.boston.com/realestate.
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