Federal Stimulus, government money flowing to the banks, banks looking to lend! Sounds great! Unfortunately there seems to be a fly in the ointment and it may be the bank appraisals.
Given the economic conditions of late, many popular local towns such as Belmont, Watertown, and Arlington have not seen a surplus of inventory or real estate sales in the last three to six months. Stats taken from Banker and Tradesman show Belmont real estate sales volume down by 4.3% in 2008 from 2007 and Cambridge home sales down 4.4% for the same timeframe. This means fewer current transactions for any appraiser to draw from; fewer comparables, less room for variables and more difficulty in justifying market value for any property be it a single, multi-family or condominium. For example, according to the Multiple Listing Service only three multi-families closed in the town of Belmont since January 1, 2009 with Arlington showing at eight and Watertown five. That's not much to choose from when you consider sale price, size, and location as common denominators.
It may take a few months for the market to play catch-up and give the appraisers six months of past sales data. Based on the current conditions it does look promising! Until that time, the banks still have stimulus funds and a directive from the federal government to lend. One would think that there would be some leeway given to the appraiser to find appropriate comparable real estate sales in order to ensure that the transaction takes place. The appraiser may need to be more creative and begin using comparables in neighboring towns and use sales data 7-8 months back rather than confining the comps to 3-6 months.
While the stringency of policy varies from mortgage lender to mortgage lender, most institutions are being extremely (and unreasonably) strict about appraisals. Appraisers may not have sufficient data to make accurate value determinations, and banks -- with the pendulum having swung far to the extreme -- may be overly conservative in their value determinations. Should you be lucky enough to buy or sell a property, the bank may appraise the property for a lower value than the agreed upon price, throwing the purchase into turmoil. It is a stimulus all right, just not the kind we were looking for. You may want to ask your lender (before signing on the dotted line) if they have had many problems with appraisals in your area lately and how they are handling the situation.
Our advice is to know your market and stay informed. Avenue3's daily updates will info you with the stats you'll need to help make your future Belmont real estate experience a knowledgeable one. Sign up today to receive this info for Belmont or your town of interest!
News from Somerville -- a brisk Real Estate market, electric atmosphere in its many Squares, and Bono!
The Somerville Secret is old news. For the past 15 years the “hip” and the “unhip” have flocked to its squares for food, drink and entertainment, and stable real estate acquisitions when cities like Boston and Cambridge became unaffordable to most.
Last week Davis Square -- already a mecca for great barbecue, homemade ice cream, a good pint and people watching -- was electrified by the arrival of U2 to the Somerville Theater. A Somerville resident referred to the trendy square bulging with fans in this tight economy as the Davis Square stimulus package for local businesses. Love and appreciation to Bono aside for putting the Square on the map nationwide, the Somerville real estate in Ball, Davis and Teele Squares is doing very well on its own this year!
With ad comments that most likely began with the phrase, Walk to ………Square, great location and close to restaurants, cafés and the “T”, five desirable multi-families were snatched up and closed in the first three months of the year at an average selling price of $544,220. An example at the lower end is 15 Electric Avenue a property in need of renovation, with an asking price of $389,900 and a sale price of $451, 000. On the higher end is 4 Aberdeen, with an asking price of $639,900 selling at $620,000. Impressive in this current economy, but not unusual.
As for condos, three sold in the same time period in the above mentioned locations with an average sale price of $383,667. Currently there is an inventory of 10 listings on the market to choose from with an average asking price of $493,740.
There are many Somerville homes to choose from in a variety of locations as well. For a complete view of properties -- singles, multi-families and condominiums -- click here or tailor a search based on your specifications by registering with Avenue 3 for daily updates.
The daily updates will enable you to stay on top of the Somerville housing market and who knows, the next time Bruce Springsteen (7 years ago) and U2 make an appearance in Davis Square you too may own a piece of Somerville real estate and walk to Davis Square to join in on the excitement! And don’t forget to end the day by rewarding yourself for choosing Somerville by enjoying a range of dining experiences at your feet! Very nice.
Additional Resources from Avenue 3 Real Estate:
Current Somerville Condo Search Results
Current Somerville Single Family Home Search Results
and all Multi-family homes
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