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October 19, 2007
Lack of Housing Production Threatens Local Economy
High housing costs and an inadequate housing inventory threaten Greater
Boston's economic competitiveness, according to a report released last
week by the Boston Foundation.
According to the report, the Commonwealth must dramatically increase
production of housing that would be attractive to young families and a
growing workforce. It is estimated that 18,000 units per year over the
next several years are needed in the 161 cities and towns covered in the
report.
According to the
report, permits
for all housing in Greater Boston dropped 12 percent in 2006.
Single-family housing starts declined by more than 25 percent in 2006
and are predicted to decline 29 percent in 2007.
The lack of
entry-level housing and rapid rise in home prices earlier this decade,
has led to a reported loss of 50,000-62,000 residents annually since
2004. Many of these young professionals, ages 20-34-years-old, are
leaving Massachusetts for states with cheaper housing and better job
opportunities.
In response, the
Greater Boston and Massachusetts Associations of REALTORS® are part of
an industry wide coalition working to introduce a Starter Home
Initiative in Massachusetts.
For more
information on the Starter Home Initiative visit MAR’s
website. You can also read the Boston Foundation’s report
online.
U.S. Congressman
Frank Holds Local Hearings on Foreclosure
A hearing sponsored by Rep. Barney Frank (D-MA), Chairman of the U.S.
House Financial Services Committee, took place this week to discuss
future plans to decrease foreclosures and alleged discriminatory lending
in Massachusetts. Boston Mayor Thomas Menino testified that 75 percent
of Boston’s foreclosures occur in four communities with high minority
populations – Dorchester, Roxbury, Mattapan and Hyde Park. An estimated
35,000 Bay State homeowners are facing increased mortgage payments due
to subprime loan resets, according to First American LoanPerformance, a
California-based research firm.
Notably, the U.S.
Treasury Secretary Henry Paulson announced this week that home
foreclosures will continue to rise if lenders and the government do not
step in. He believes the decline in home sales and housing prices pose
the “most significant current risk to our economy.” Paulson recommended
an aggressive approach that includes national standards be implemented
for mortgage brokers and a simple document be provided to buyers at
closings. The document would spell out all costs and any rising monthly
payments.
For more on
Secretary Paulson’s remarks, click
here to access a New England Cable News story, which includes
commentary by Greater Boston Real Estate Board CEO Greg Vasil.
GBREB to Testify on Proposed Change in Utility Rate Structure
The Greater Boston Real Estate Board has taken a firm stand in
opposition to a movement to change the utility rate structure in
Massachusetts. The effort, called Revenue Decoupling, would guarantee
utility transmission companies a fixed level of revenue, regardless of
the amount of product they delivered.
For example, if
your usage dropped from a prior year due to favorable weather conditions
or reduced consumption caused by changing economic factors like
increased vacancy, or conservation measures, under Decoupling, the
utility would be able to charge the consumer based on the rate of usage
in the previous year. Under the present rate structure, utilities are
compensated for unrecovered costs but only after a rate review process,
which in most cases has not been conducted since Deregulations was
implemented. Decoupling takes public and regulatory accountability out
of the process.
GBREB has engaged
the services of Bruce Oliver, President of Revlo Hill Associates in this
proceeding. Mr. Oliver is an Arlington, Virginia based consultant who
has been an expert in energy matters for over thirty years, and has
testified in over 23 jurisdictions including US territories and foreign
countries on this issue. He most recently represented AOBA, the
Apartment and Office Building Association of Washington D.C. on a
similar matter. AOBA is affiliated with both BOMA and NAA.
Revenue Decoupling
was installed in the state of Maine several years ago, and utility rates
skyrocketed. There was such an outcry by consumers that it was
repealed. The Greater Boston Real Estate Board wants to prevent that
same mistake from being made in Massachusetts.
GBAR Needs Your Input
on Licensing Requirements – Take Our Survey
Education is critical to the success of a REALTOR® and advancing
professionalism within the real estate community. Recently there has
been discussion among GBAR's Education Committee about increasing the
continuing education requirements to retain and obtain a real estate
license in Massachusetts. Furthermore, a work group has been
established at the Massachusetts Association of REALTORS® to study this
issue further.
GBAR’s Education Committee would like your feedback on the issue via a
brief online
survey,
which should take 3-5 minutes. Your responses will help to measure
membership support for this initiative and satisfaction with the current
licensure curriculum and requirements. We’d like to thank you in
advance for your time and ask that you please complete the
survey
by October 22.
FSBO? Not in the
Boston Market
We all know the benefits of using a real estate professional to sell a
home, but it appears sellers in the Bay State are catching on.
According to a report released last week by
ForSaleByOwner.com, FSBO
activity in Boston has declined 21 percent since last year. That drop
put Boston fourth on the top 10 list of cities with the sharpest FSBO
declines.
That’s not
surprising considering the median selling price of homes sold by an
agent in Massachusetts was 24 percent more than FSBO homes last year,
according to the 2006 Massachusetts Profile of Home Buyers and Sellers.
Notably, the three most difficult tasks for FSBOs nationally are
preparing and fixing up the home for sale; understanding and performing
paperwork; and selling within the time planned.
You can access
MAR’s entire report by visiting its
website. The National Association of REALTORS® also has a useful
field guide pertaining to FSBOs that can be accessed
online. To
promote the use of a REALTOR®, you can also download web and e-mail
banners
through NAR.
Home Prices
Stabilizing in Greater Boston
According to a report released last week by PMI Mortgage Insurance
Company, 11 major metropolitan areas face a more than 50 percent risk of
declining house prices in the next two years. Fortunately, the Boston
market is one of the most improved. The average risk score for the
nation’s 50 largest metropolitan statistical areas is 329. Although
higher than the average, Boston’s score dropped 101 points to 400.
Click
here to read highlights of the report.
According to data
from MLS-PIN, the third quarter 2007 median sales price for a
single-family home in Greater Boston was $501,500 – a less than one
percent decline from the same time period in 2006. The median sales
price for condominiums in the third quarter of 2007 increased 5.6
percent over the same period one year ago reaching $359,000.
Keep an eye out in
November for GBAR’s Real Estate Rewind – a quarterly report on
residential real estate activity (single family and condominiums) in the
54 cities and towns in GBAR’s jurisdiction.
HUD Publishes Final Rule on Standards for Mortgagor's Downpayment
Assistance
On October 1, 2007, the US Department of Housing
and Urban Development (HUD) published a final rule on Standards for
Mortgagor's Investment in Mortgaged Property. The rule goes into effect
on October 31, 2007, and establishes that a prohibited source of downpayment assistance is a payment that consists, in whole in or in
part, of funds provided by the seller or any entity that financially
benefits from the transaction. NAR submitted comments to HUD supporting
this rule on July 17, 2007. Certain non-profits have raised concern
because they were taking contributions from property sellers,
subtracting a fee, and then granting the remaining money to buyers of
the same property. In essence these non-profits created a
“seller-funded” downpayment program, which NAR believes can result in
home price inflation and risks for increased delinquency and
foreclosure. In an effort to preserve qualified downpayment programs,
NAR strongly urged HUD to construe the limits on non-profit downpayment
assistance as narrowly as possible.
NAR supports downpayment assistance programs to
help borrowers purchase a home. Downpayment programs take many different
forms. For example, NAR has been a strong supporter of the American
Dream Downpayment Initiative (ADDI). Other forms of downpayment
assistance permitted with this ruling include assistance from family
members, the borrower’s employer, state or local governments, and
charitable organizations that do not rely on a party with a financial
interest in the transaction.
Are
You Reaching Today's Tech-Savvy Consumer?
If you'd
like to learn how to communicate more effectively with your buyers and
sellers or have an interest in using your current tech tools more
effectively, then we invite you to attend the
Ultimate Technology Certification Course
on October 25.
Matthew Ferrara, CEO of Matthew Ferrara Seminars, Inc., will present his
exclusive course at the Natick Courtyard Marriott from 9:30 a.m. – 4:30
p.m. Participants can expect to learn the
“best of the best” techniques on using technology for prospecting,
listing presentations, direct marketing and multimedia advertising.
Subjects to be covered include: Prospecting on the Web, Enhancing
Listing Presentations and Tapping into Text Messaging. Cost of the
program is $299. Don’t miss this exciting opportunity – we’ll see you
there!
Upcoming GBAR
Events
9:00 – 11:00 a.m.
– Real Estate Finance (taught by Amy Greene)
11:15 a.m. – 1:15
p.m. – Real Estate Advertising Compliance and the Law (Bill Mullen)
2:00-4:00 p.m. –
Probate of Estates (Bill Mullen)
Cost $45 single
class/$105 all day
9:30 – 11:30 a.m.
– Lead Law (taught by Joe Stallone)
11:45 a.m. – 1:45
p.m. – Commercial Basics (taught by Rob Nahigian)
2:45 – 4:45 p.m. –
Commercial Leasing (taught by Rob Nahigian)
Cost: $45 single
class/$105 all day
9:30 – 11:30 a.m.
– Residential Mortgage Loan Market & Credit Today
11:45 a.m. – 1:45
p.m. – Foreclosures
2:45 – 4:45 p.m. –
Buyer Agency
Cost: $45 single
class/$105 all day |
