Too much sunshine?

you are correct about giving the public objective , expert and professional service...we here at our company have standards for performance by our agents...
Rememeber...not all housing forclosures are because of a bad loan or a real estate agent that may not have given the customer the right information.
Sometimes job loss and health issues are reasons why families lose homes...

"Do you trust real estate agents for advice on when to buy a home?"

I think if anyone is asking that question he/she shouldn't being looking to buy house. On the bright side, one could ask the agent that question to see whether he/she is an honest agent.

Quote: "Would you buy from a pessimistic agent?"

Great. It's OK to lie because the client wouldn't be buying otherwise. Way to reinforce those stereotypes.

I think that agent just proved your point.

Your article was sufficiently "pessimistic" for me to determine, on behalf of my real estate company, to NEVER advertise our real estate listings in the Globe again. The reason? Advertising is one of the forces that keeps your print publication alive, from both the real estate industry and the automobile industry. From this point forward, we will spend our advertising dollars in businesses and publications that support this industry.

The housing market is integral to the healthy economy of this country. You purchased a condo last year and I would be curious if you used the assistance of a Realtor, who by the way, is not just a licensed salesperson. How did YOU determine it was a good time to buy? Maybe you should have continued to rent and waste your hard-earned dollars. Any accountant or financial investor worth their salt will tell you that real estate investment is still one of the better investments a person can make. That being said, we all have to live somewhere.

All those people who purchased homes in the past few years did so of their own accord and FREE ACT AND DEED, as they were all asked at their conveyance. Finger-pointing and placing blame on anyone and everyone else has become a national past-time in this country and it needs to end. When should we become accountable for our actions?

My father used to tell me "every man to his trade" - I will not comment on your chosen field and how you do your job. My argument is that you have no right to paint the real estate industry in such broad strokes. Optimism is not such a bad thing! In fact, my preference is to only hang out with and conduct business with optimistic individuals - oops, I am stereotyping!!!

Wow Ms. Crosby, that sounds an awful lot like extortion. "Print what I tell you to print, if you know what's good for you." To top it all off you end with "I will not comment on your chosen field and how you do your job," and yet that is exactly what you did just 3 paragraphs earlier! A journalist's job is to report facts, not propaganda for the paper's advertisers.

Laura Crosby said:
"Your article was sufficiently "pessimistic" for me to determine, on behalf of my real estate company, to NEVER advertise our real estate listings in the Globe again."

And likewise, I think that anyone who reads this should never utilize the services of Laura Crosby or Compass Realty Brokerage Services LLC. It may not be illegal for businesses to blatantly try to coerce journalists into biased reporting in this country, but it certainly indicates a lack of integrity. I don't think that Binyaman necessarily tries to put a pessimistic spin on things, he just tries to look at things with a critical eye, as journalists are supposed to.

You should be ashamed of yourself, Laura. Making statements like this gives the honorable people in your profession a bad name.

I'm buying right now (putting an offer in on a single family home in Dorchester today). Its foolish to try and time the market. I graduated college in 2003, I married in 2005. Buying a house during this time was silly--I knew our income would go up the most these early years, I wasn't sure if my hubby and I were going to stay in Boston, etc.

But you know what? We love it here. We're going to stay in this home 5-10 years. Its a shelter for us first, and an investment second. Our patience in waiting for us to decide that we were going to stay (I think you shouldn't buy unless you are committed to staying put 5 years minimum) and waiting for prices to correct has paid off.

Might it be better in a year? Maybe. Real estate is always a maybe. But I'd probably have more competition with other buyers in a year too. Right now there's tons to choose from a few buyers to outbid me.

In the end, in 5-10 years, we'll be fine and that's what counts.

Ms. Crosby,

Renting in a declining market is certainly prudent and is certainly not a "waste [of] your hard-earned dollars." I have been sitting on the sidelines since selling my house in March 2007. I am renting an equivalent home for slightly less than the tax effected interest payment on a Jumbo 30-yr conforming loan. Insurance, hot water, gas, and maintenance is included in the rent. I stepped up contributions to retirement accounts roughly equivalent to a full mortgage payment.

Further, had I purchased another home immediately, I would have lost approximately 4% of the value of the home today. The S&P 500 depository trust would have have lost approximately 4.8% over the same time frame. However, 4% loss in real estate is misleading as housing is a highly levered investment (5:1 for 20% down). Losing 4% of the value of the home when posting only 20% down translates into a real loss of 20%. Take a $100,000 home whose price declines $4,000. You lost $4,000 on a $20,000 investment. This loss is not tax deductible like equity or bond capital losses.

This is, of course, before the realtor commission adds an additional 5-6% or $4,800 - 5,760 to the loss making the effective return on investment minus 44% at best.

Ms. Crosby, looking at housing inclusive of all fees, maintenance, insurance, etc. housing is only a modestly performing investment when holding for 30 years in nearly all markets.

A.B-G,

Congrats on the house. You are buying for all the right reasons.

I would like to put an unsolicited caveat on your post though:
If the housing market declines 4% per year for the next two years - which it did following the last housing bull market - it will take you nearly three years to break even with a 4% appreciation rate each year. (According to the NY Times, the current housing bull market started in 1998 and housing appreciated a modest 6.8% per year.) This is before you include the net expense and related tax benefits of homeownership.

Real estate is not ever a slam dunk.

Bravo A.B-G ! We need more people just like you (who are purchasing for the purpose of buying a home, not just an "investment") for the housing situation to settle back to normalcy.

Providing no specific examples of agents or incidents, Binyamin has written an ill-informed, myopic opinion piece generalizing about the market and reinforcing a stereotype of "always sunny" real estate agents.

In addition to being an agent based in Lexington myself, I am a musician who travels often. When people in different areas ask me with a look of concerned sympathy how the market is here, I feel like I must seem like just such a Pollyannna when I inform them that, while the market is certainly not the same as the gangbusters 2002-05, I nevertheless had an extremely busy 2007, (my busiest year of the past , in fact). In the same issue of the Globe Magazine, there is an article on 25 zip codes that saw upwards to 60% increases in prices over the past few years. Someone should have alerted Appelbaum to this information.

The truth is, all real estate is local and in such areas as those spotlighted in your zip code article, the market ain't so bad. As an agent, I work with sellers but more often, buyers. While Appelbaum is attempting humor in his closing paragraph with his image of an agent informing his clients to wait it out a bit, I often do counsel buyers to wait or offer something lower on a listing I feel is overpriced. However, on average in such towns as Lexington, Newton, and Brookline, houses are still selling within about 95-98% of their asking price.

We had a house that came on this weekend for $799k and had 4 offers and sold for over asking price today. When, as a seller's agent, I have 75 people through my first miserable-February weekend open house and three offers in the first week of the listing for a renovated cape priced at $875,000, what am I supposed to tell my buyer clients who continue to read stories in the Globe about how bad "the market" is and insist on making low-ball offers that don't go anywhere and lose out on houses they actually want?

"The market" is different from zip code to zip code, never mind state to state. And clearly, few can successfully predict where any market is headed. While with any profession -- journalists included -- there are exceptions, most agents I deal with are experienced professionals in it for the long haul who take their role seriously on either of the real estate transaction. Most of our business comes from referrals. We invest great care and time into our clients hoping they will send more people to us. Lying or optimistically exaggerating the state of the market is not to our advantage and those short-sighted exceptions generally will not last in the job. Professional agents provide the relevant data as well as informed opinions on getting the best deal as sellers or buyers.

Surely, the public who continue to hire agents are not all being duped by unscrupulous agents lurking for the next sucker.

If someone is buying a house they can't afford, they should take responsibility for themselves first, and question their mortgage broker second before looking to their real estate agent, who relies on a pre-approval from the mortgage company and a stated price range from their clients. In any market, something is only worth what a group of people are willing to pay for it.

Don't be too harsh on Ms. Crosby. If I were a Realtor--and I'm not--I might take exception to the Globe's penchant for negative real estate press. It's a free country, with a free press and the freedom not to support the press with your advertising or subscription dollars if what they write offends you.

If it's not the bottom of the market, it's close to it. Prices are down. Rates are low. If you need a place to live, sure it's a good time to buy. The only thing that makes it tough to buy is a lack of easy money in the market.

You never see the bottom of the market until you look in the rear-view mirror.

I think anyone who listens to a realtor trot out his favorite optimistic
story laced with unverifiable facts is an idiot at a time when the press
and media is littered with the stories of the calamities being endured
across the nation by homeowners.

I've been dealing with a real estate agent, who also happens to be a friend. Like many other agents, he's also overly optimistic and always says it's a good time to buy. However, I know better to do my own due diligence and make my own determination about when is a good time to buy, of course the agent will try to push sales as it's usually their bread and butter. I'll say one thing, in retrospect, i'm really glad that I was priced out of real estate for the last few years. Now, I'm in an excellent position to buy in the next 12-18 months. Real estate agents can relax, the buyers will now be telling the agents when it's a good time to buy. We're in the drivers seat............ at least for now!

I've commented in the past on apparent excessive sunshine in Binyamin's blogs, so I also feel compelled to comment that he has rectified his coverage to be a bit more balanced (if a bit flip-floppy for my personal taste- but then, the economy has certainly done a bit of a flip-flop in recent years as well).

With that said, perhaps to be the only one truly responding to Binyamin's questions (which I assume he was actually looking for responses to): no, unfortunately, I don't trust most of 'em, based on my past negative experience with 95% of them; yes, I really do care; and unfortunately, whether I'm prepared or not is irrelevant- I'm forced to. There is the 5% that are trustworthy, but "once bitten twice shy" is what I have to say on that. Now when I say trustworthy I mean trustworthy from the eyes of a consumer. There are those who are passionate believers who aren't lying but whom that I trust just as much as an evangelical car salesman who truly believes in his company. To do sales, you have to believe in your product. Or you have to be sadistic.

Also, I feel compelled by the responses on this posting to say this:
- Anyone who reads these comments should note how these commenters have commented in the past and note their bias. I'm bearish but still househunting (sort of- I'll leave my thoughts on that for another time). If you don't, well, it's your own fault for not doing your homework.
- (Mr. Janovitz) I don't believe Binyamin was looking for additional stories to append to his blog. A blog post is usually either a singular story or a generalized thought, not a research paper that will go into great detail. It would probably actually be more helpful for you to provide a website driven by a _lot_ of data that shows which areas have seen price increases, decreases, or neither, rather than spitting out yet another anecdote of "one (sales)person's story". In contrast, Binyamin is going by the stories of many.
- Finally, the NY Times is a company like any other. Journalism makes money when people listen to/read the stories. A couple of years ago, excessively bullish stories sold. Now the (excessively? I don't think so, but maybe) bearish stories sell. And if that's shocking to you, I suggest you stop paying attention to news and not advertise in any news outlets. Sell in your industry advert-zine or in a non-news outlet.

"I think anyone who listens to a realtor trot out his favorite optimistic
story laced with unverifiable facts is an idiot at a time when the press
and media is littered with the stories of the calamities being endured
across the nation by homeowners."

While I cannot verify Bill Janovitz's claims of houses going for over asking price in Lexington, I can say that my husband and I had the pleasure to work with him as buyers, and then interviewed him as a listing agent when we sold our home a few years later. We found him to be very honest about market conditions and pricing our property correctly (this was Fall of 2005) and not at all the "rah rah it's all a good time in real estate" type of agent. This was refreshing, and good for us to hear as it helped set our expectations. Also, he councilled us that it may be better to go with a local agent (we were not in Lexington), as he felt it could have helped us find the correct buyer for our property. I can't imagine an agent being any more honest than that.

As for Lexington, it has one of the best school districts in the state and is a short trip down Rt. 2 to Alewife; I am not surprised prices have held up there. Personally, I'd love to live there, but prices have not come down enough for my family to even consider it, so we'll look elsewhere to buy. Next year :).

Real estate agent has as much to blame as the mortgage broker. They lied to create a false sense of urgency to get people to buy a house so that they can make their 6%. It is never about optimism. It is about $$$$$. Crosby is a perfect example, forcing a journalist to distort the truth.

I am glad you wrote this article. But why do media continue to quote a real estate agent. Or ask them to predict the real estate market.

If it is such a good time to buy, why are they not buying all the foreclosure themselves?

Bill Janovitz:
However, on average in such towns as Lexington, Newton, and Brookline, houses are still selling within about 95-98% of their asking price.

The market is going down, sales are down, prices are down. Isn't 95-98% less than 100%??? The market is heading down, there is no question about that, The only different from zip code to zip code is the extend of the price and sale decline.

Buyers don't give your money away. Wait. Don't be afraid to offer a reasonable price. This is not low balling or insulting. Sellers are constantly insulting buyers with their high-ball dream price. A market price is set by a transaction -> A wiling buyer and a willing seller. Not by the amount of debt the seller owe.

The issue here is that real estate agents use to work at Mc Donald’s. They were burger flippers and table cleaners. Then they found out that it does not require an education to become a real estate agent.. so.. they began saving nickels and dimes to get into the program. They then had the ability to steer people into buying expensive homes that were 60% overvalued. The people in these homes are now loosing them or watching the very beginning of the crash. They will soon have a home that is worth 50% of what they paid for it. The real estate agents will continue to disappear into the shadows since nobody will like them anymore. They will be seen sometimes when driving... through a window.... and you will probably hear them asking.. "Would you like fries with that?".. the cycle is complete!

If I followed a "its a good time to buy" advice from an RE agent each time I have heard it, my family would have lost hundreds of thousands of dollars by now. The best thing to do is not listen. In fact, the more optimistic the RE agent sounds, the more I know that I am going to get hosed taking their advice.

My family works with one agent who is a straight shooter. By not being overly optimistic, she gets our business. By not lying, she gets our business. I hope this is a lesson to the rest of em.

SRT - This RE market may have bottomed. Or it may be far, far from the bottom. I dont make a claim to know. Somehow, you claim it cant possibly be the bottom since it is already down. That is horrifically stupid logic. Did you start buying tech stocks after the NASDAQ went from 5000 to 4000? Do you rush out to start shoveling your driveway after the first 2 inches of snow, thinking it cant possibly snow anymore?

If you think its a market bottom, please enlighten us with a detailed reason why.

Martinn,

All facts are verifiable (assuming you were referring to my post). You chose to ignore my central point that if one views this as one monolithic real estate market, he/she does so at his/her own peril, which was a response to Appelbaum's original piece. If one is an "idiot" for listening to a broker "trot out" his "favorite optimistic story" (e.g. the fact that I personally had over $19 million in RE transactions for 2007), then certainly one must be an "idiot" if one continues to base his real estate decisions on news stories that extrapolate from markets in Las Vegas, Miami, etc. And one would be really foolish to take an article like Appelbaum's at face value sans any examples. Are there overly optimistic agents? Of course, just as there are overly optimistic stock brokers, like mine who had me purchase UBS and Citigroup in September. My point is don't generalize about markets and more importantly, don't generalize about dumb old RE agents, many of whom counsel their clients wisely. Do you think the market is hurting in Brookline? Lexington? Concord? Arlington? Weston? Palo Alto? I don't deny there are macroeconomic trends and the economy as a whole is being pulled down by the credit crisis, the causes of which are not in dispute here. But if somoene is expecting to scoop up a great house in any of these towns by making an offer 30% off of asking price, good luck.

My facts are verifiable, while Appelbaum takes a potshot at all real estate agents without even citing a specific example, never mind one that is verifiable.

Regardless of area the credit crunch and banking crisis are national issues shrinking the pool of buyers everywhere. If you buy now you will lose out big if you don't plan on staying there for the length of time to break even (could be 5-10 years). In this case it may be cheaper to rent.

Agents make money based on the sale, of course convincing you to buy is going to mean a pay check for them. The comflict of interest is so obvious.

It is amazing how angry people get when you call them out. They write harsh paragraphs trying to defend the reason they refuse to aknowledge what is happening to the economy and in the process end up proving the point they are debating.

Looking at things for what they are is not a weakness. I would buy a house from a realistic agent. This "always a good time to buy" is getting old and see through.

It is very true that realtors are, in large part, unconcerned about the consequence of selling someone an overpriced house. Like the mortgage lenders and appraisers, now they have no remorse for their role in the mess. Besides being the quintessential puffers, I seemed to always be left with disappointment over realtors' lack of knowledge concerning matters they should know. Next time you are viewing a property, ask a few technical questions about lot dimensions or zoning or mechanical warranties, and watch the shiny salesman disintegrate before your very eyes. Face it, these are not super talents with deep credentials and verified ethics.

Best commentary on this was in 2006 from the Motley Fool article "I want my bubble back!":

"There's nothing funnier or more satisfying ... than watching the National Association of Realtors (NAR) change its tune these days. ... the NAR is full of it and will spin the numbers any way it can to keep up the pleasant fiction that all is well."

Carlyle, Bear Stearns, and many others have gone/are going bankrupt on AAA mortgage paper. Futures markets and forecasts for bubble markets like Boston are projecting 30 percent plus losses. Anyone who listens to these clowns will lose a lot of money. The RE industry was a key factor pumping this bubble. Of course their reputation is in tatters. Just wait until the ensuing recession for this negative experience to be burned in for a generation or more.

Bill,

On your website you claim 10 million for sales for 2007 , here it's 19 million, which is it?

BTW what is the address of the 799K home you claim to have "sold" . I find two homes in Lexington listed for $799k.

85 MERIAM STREET - went on the market at 899,900 and now after a 100k reduction is listed for 799K ( guess they're not going to get 95% of asking)

10 OAKLAND STREET - originally listed for 839,000 now listed for 799k (goodbye 98% of asking)

Martinn is dead on with his comments....

Trust real estate agents? No way!
Their goals are completely opposite to the goals of their clients!
We want to buy a house of our dream for less.
They want to sell us a house for as much as possible because they got commission from the home price!
You say they got comission from seller? He-he-he... So, the buyer's agent spend time with you for free?
And they do everything they can to make you pay more!
They manipulate their MLS database: you never know exactly for how long this or that house has been in the market.
85% home apprisers say they were/are under pressure from real estate agents to inflate housing prices. They even send a letter to Congress asking to protect them!
They ALWAYS tell us that "this is a great time to buy"!
They told us so in the peak of the boom when prices were insane.
Thyey told us so when prices just started to fall in the begining of 2007.
They tell us so now when it's obvious prices will fall more to get to reality!

How is a real estate agent different than any other salesperson? Of course they are going to be wildly optimistic, touting the positive, spinning the negative, cherry-picking facts. That's what salespeople do. Ever hear the terms "charming", "convenient", "cute" ?

And on the contrary, I think the Globe has been churning out so many RE puff pieces lately that I don't go any further than the headlines.

The thing I don't understand is "98% of asking price" ... is this initial asking price or final asking price? No one ever talks about the difference between initial asking and final sales price ...

Hello. We looked at 32 Clelland Road in Lexington and it went FAST. It was listed at $799K. If it is sold or under contract, it would not show up in the listing service searches any more.

Sean, our local MLS tracks this very accurately. WIthin the the city of Boston, most condos are selling within 95% of original asking price, not final asking price.

Some of this is because those people who can't find a buyer just withdraw their listings. The reasons for not finding a buyer is often that the seller has listed the property at too high a price for what the market will bare (bear?).

The blogger who wrote the Globe column in Sunday's paper was not writing an "article", he was writing an "opinion piece" which is quite different. He should not be held to the same standards in the article as your typical reporter.

Having said that, please, don't hide behind "I'm a journalist, I have integrity." On the list of most respected professions, newspaper reporter is just a few lines above real estate agent, used car salesperson, and crack dealer.

Here again...submitted a $310K offer on a $349K priced home yesterday. Wrote a nice handwritten introduction letter, explained my rationale for my offer, backing it up with comps from several other sources. This should be easy (although I'm guessing it won't be) because a 1/2 block away another house is going for the *right* dollars per square footage--$166 per square foot versus $187 per square foot.

I got the best advice from an agent on Trulia (not my own buyer's agent--although he is a nice guy, I like to see what other people think too--I take everything that people say with a "grain of salt.") who said that what the current owners owe and what they overpaid should have nothing to do with my offering price. Indeed.

However, I doubt the sellers will feel the same way, although its two price drops later (the last in December 2007), 10 months on the market later, and they paid $347 in 2003.

Like someone else on this board I am *SO* grateful that homeownership was out of reach these last few years. Its been worth the wait.

Even in the doomsday scenario someone also gave me, still...that's 3 years down the road. I'm going to be there for 5 years minimum. And so psyched!

@ Bill, "Do you think the market is hurting in Brookline? Lexington? Concord? Arlington?"

Big time. I've been watching it. And it's going to get a lot worse. Here's what the S&P/Case-Shiller futures markets say for SFH in Massachusetts: tinyurl.com/ytdcvp. That's a 30 percent drop from the 2005 peak by 2011. And yes, Brookline and the western suburbs are correlated 1:1 on this downside. But these forecasts are almost certainly optimistic given the imminent recession caused by the bursting housing and credit bubbles and subsequent financial crisis. Oh, then there's the upcoming "Retirement Boom," when selling will exceed buying in MA sometime between 2011 and 2015. I can think of no reason why this huge demographic would not impact any "recovery" in 2011.

The bottom line is that anyone who would listen to a smiling realtor and buy now -- in the face of collapsing prices, a financial crisis, spiraling foreclosures, recession, and a looming demographic contraction -- will almost certainly be underwater even at 20 percent down.

Mr./Ms. Hard Rain,

I actually closed $12,250,000 in closed gross sales for 2007 (not including referrals sent out). the web site has not been updated. I apologize for the $19 million figure, which I actually had confused with other listings still not sold. This also, of course, does not include anything from 2008, which includes the one on 21 Liberty, for $875,000, which will close soon for close to asking price, the one with three offers and sold in a week. You are confusing two of my examples. The one for $799k is the one on Clelland that I had a bid on with a buyer client at full asking price. It had 4 offers and went for over asking price.

Oakland St. was listed and sold in 2006 and is being re-sold right now. That is an example of a value drop.

85 Meriam was fishing for a week. It is an estate sale (seemingly) and will either be a tear-down or total reno and is under agreement. Last list price $799k.

Total single family sold stats for 2007 in Lexington, via MLS:

Sales: 345
Avg. Days on Market: 114
Sales price to final list price ratio: 97%
Sales price to original list price: 94%
$696,000 median

for 2004, a better year:
Sales: 357
DOM: 84
Ratios of 99% and 97%
$688,000 median

I would say this is hardly cause for panic. Nor would I say the market here, at least, is down "big time." f it is, well, I feel OK about being down big time. But then again, I am no Chicken Little; I am Pollyanna, and Always Sunny, right? Send your referrals. I am always happy to assist ;)

I don't think Laura Crosby of Compass Realty Brokerage Services LLC understands the important role newspapers play in our culture and what they try to stand for.

She reeks of someone desperate for a sale.

Sunny Jim - Crazy country we live in. You are correct on every point. But despite the natural economic need for monetary deflation, the US Fed is going to try to bash the US economy into an inflationary mode using unnatural stimuli. They might even succeed. I have no idea what the end result of this mess is going to be. Home prices NEED to fall a little more to be inline with salaries and leave breathing room for maintenance issues. But despite the need for deflation, we might get helicopter cash and end up with hyperinflation. Additionally, the US government has basically announced that you might as well buy a home that you cant afford since they will arrange for you to stay there. If you were forced to leave a home you cant afford, suddenly its a social issue that needs to be discussed during the election. What a mess.

Bill Janovitz:

You asked, "Do you think the market is hurting in ... Arlington?"
To answer your question: yes.

Following are the median sales statistics from the Warren Group for single family homes in Arlington.

Arlington:
2005: $502,500
2006: $486,000
2007: $471,000

The facts speak for themselves.

I have been looking for 2 years trying to find a home which I like and can afford not easy on my income. I have a real estate agent who has stuck with me through 3 home inspections and numerous wild goose chase house viewings,

Do real estate agents force buyers to buy homes? I think not. Buyers call up agents when they are looking for homes and need some help.. Make sure that you have a true "buyers agent" There are bound to be some other good ones out there.

Bill-J says

I asked you twice for verifiable facts concerning your Lexington
bidding-war-on-a-cape anecdote and how exactly you conclude
things are sunny. You dodged the question (i.e
proved no means of verifying your facts ) on both occasions.

This is typical of my experience. So I'll answer my question
for you.

Here are the Warren Group's published stats for these towns.

Lexington average single family sales price

2007 Jan - Dec 691,500
2006 Jan - Dec 700,000
2005 Jan - Dec 705,000

Arlington

2007 Jan - Dec 471,000
2006 Jan - Dec 486,000
2005 Jan - Dec 502,500

Concord
2007 Jan 694,500 (only 6 houses sold...)
2006 Jan 612,000 (14 houses sold)
2005 Jan 625,500 (12 houses sold)

Yeah things are just plain wonderful out there..

Dan,

RE: Arlington, it is important to distinguish between Warren Group data and MLS. The former includes many private sales that pass between family memebers and other sales that happen outside of the market that gets advertised and "marketed" by realtors and even FSBO's via MLS. You can choose either one as more refective of market conditions, but it would seem that the MLS data gives a more accurate representation of fully marketed homes.

That said, here is what I come up with from MLS for Arlington single family median prices:

2005: 548,493
2006 555,156
2007: 539,444

I was actually surprised to see that drop for 2007, as it seemed that everything I saw that was decent had bidding wars. But I think sellers were pricing heir houses more realistically. Again, off peak levels, but hardly worthy of the dramatically wrought language I have seen here and other places.

Always sunnily yours...

I knew Binyamin's article would bring the relitters scurrying in like roaches on peanut butter.

What fun, reading comments that prove his criticisms were far too mild. We get to watch Laura Crosby of Compass Realty Brokerage Services LLC incinerate her own reputation. And we have Mr. Janovitz insisting that prices in tony Lexington will be unaffected by such little nuisances as, say, the total collapse of the global financial system. Sure, all real estate is local. I'm sure Lexington has its own central bank.

Anyone who trusts a used house salesman for advice on when to buy is dumber than they are.

Yes, Bill-J those good old reliable MLS forecasts and trends. Produced by our ever sunny and trustworthy friends the National Assoication of realtors whose lifeblood depends on a cheery ever upward trend. That 6% commission sure can make those other sales seem irrelevant can’t they, ah yes those murky irrelevant “private sales” as you call them.

Your professional calling seems to have invaded your prose, vague facts embellish every relentlessly optimistic stroke of your pen.

So take your pick folks. Trust the stats from the fat cats selling you the product and salivating over that hefty 6% or put your faith in the 135 year old venerable Warren Group whose business and reputation depends on accurate forecasting and statistics and who reap no financial reward whatsoever.

"Total collapse of the global financial system."

And it is with that note that I leave this little echo chamber of anonymously spewed hyperbole and ad hominem attacks typical of blog commentary.

All my best to you all.

Everyone knows those 97 percent sale-to-purchase price numbers are bogus -- it's standard industry practice to relist homes that don't sell. This jiggers the numbers so that the original price decline and days on market don't look like washouts. Realtors don't fool anyone with this game, and it's another form of "sunshine" that undermines their credibility.

You can't "jigger" numbers in our MLSPIN.

Once again, those who don't know are the first to criticize.

Roaches scattering, indeed.

It continues to boggle my mind that people argue the real estate market is healthy. Anybody with an unbiased eye can see that the market is still woefully overvalued.

This is the essential question that must be asked: Are most homes unaffordable for most people?

The answer remains "yes." And as long as the answer is "yes," prices will continue to drop.

@ John K, "You can't "jigger" numbers in our MLSPIN."

You know as well as I do that realtors can and do this through "delisting/relisting" all this time -- it's SOP, especially in a down market.

Because this is an important and newsworthy practice, I will cite a single and newsworthy example: the home of the NAR president. In 2006, the WaPo ran a story how the home of the NAR president was not selling. The paper-money blog picked this up and did some online price investigation. From the WaPo story and a simple Google search, let's look at the business practice of delisting/reslisting using the newsworthy example of the NAR president:

Purchase price (2001): $1.3 million.
Assessed value (2005): $2.6 million.
Original asking price (2006): $1.95 million.
Reduced asking price (2006): $1.45 million.
Really reduced, current price (2008): $1.2 million.

Yet Redfin says that the "original" price is $1,285,000 when the true original price is $1.95 million from two years ago, as stated in the 2006 WaPo article.

So realtors can and do jigger the "original" price and the days on market precisely through this delisting/relisting mechanism.

Buyer beware. And thank goodness for the web -- let's all look forward to the near future when Google and others make the MLSP obsolete and reduce transaction fees from 6 percent to less than 1 percent.

If someone knows of realtors making 6% commissions somewhere, please tell us where. With very rare exceptions, 5% is the norm in most area towns and 4% is the norm in many others.

I would be glad to be a 6% commission to someone who markets my home successfully enough to get a good price in a reasonable time period during this somewhat down market. Don't forget, most agents pay half of the commission to the selling agent, a large portion of what is left over to their brokerage and then all of their expenses; it is an all-commission/no benefits pay model. Most agents make very little money. If the brokerage industry falls and everyone markets, negotiates, and sells directly, the prices should fall by at least 5% across the board. That is to say brokers are currently paid out of the transaction. If you are a buyer buying directly from a seller, the price better not be based on comps sold on MLS or you can bet you are overpaying. If you by Warren Group numbers, your medians are broght down by $1 sales from parents to offspring and a significant number of paper transactions representing legal changes.

For the record, because this has been raised several times, the Warren Group data *does not* include intra-family sales, or nominal ($1) sales.

The data is limited to arms-length transactions, short sales, and lender resales where the transaction price is at least 70 percent of assessed value.

In my judgment it is the most accurate available measure of the local market.

In other news, please stay out of the mud. Personal experience clearly has an important place in our conversations. Personal attacks do not.

If you made a comment and it never got posted, that's probably the reason why.

Anyway, here is another example to help debunk the much repeated "It's different" in Newton:

9 Fair oaks Ave. sold for $570,000 on 3/18/2008

Last sold for $760,000 on 4/20/2007. Lehman bros. financed all but one thousand dollars of the purchase with a $609,000 interest only loan and a $150,000 piggyback. Folks that's a $190,000 loss in less than a year.....

Real Estate Prices have not yet dropped by much in Massachusetts. Does this mean they won't drop by much? No. They have a good 20% more to drop, including in the high end towns, which will outperform due to flight to quality.

Sellers are just holding back, so a market clearing price has yet to be seen. As a result, supply has gone up. Eventually this will correct.

Is this unpredictable? No. It was easy to predict, which is why I sold out of all my real estate in 2005 (I'm a small developer). And everyone who listened to me got out in time as well.

There are price/salary ratios, and monthly rent/own ratios which have been accurate for a long time. Up until the last few years. But regression to the mean is a powerful force, and we will see houses go back to historic ratio levels.

Until prices go down, I will happily pay rent on my luxury apartment in Back Bay, which is nothing compared to what the cost of ownership would be. And I'm happily making a killing in the stock market.

As an aside, I find the idea of listening to a real estate agent laughable. I've known a few good ones, but 98% of them bring absolutely nothing to the table. Listening to them is absurd.

@ Hard Rain, "Lehman bros. financed all but one thousand dollars of the purchase . . . Folks that's a $190,000 loss in less than a year."

No one should fail to understand this simple fact: plunging home values in Newton, Lexington, Concord, Boston, and all the tony and not-so-tony places you can list are the cause of a bank run on Bear Stearns last week and a near bank run on Lehman Brothers this week. Even Bloomberg is reporting that Fed chairman Ben Bernanke's home value has been hammered by falling values.

This crisis is the worst financial crisis since the Great Depression. Fed action -- 150 bps and over $400 billion dollars of liquidity based on worthless "AAA" mortgage paper has been ineffective -- the dollar is plunging to new lows and long term interest rates must rise significantly to match the risk.

This is going to get a lot worse. A lot worse. Given the severity of the problems, people should be happy if home values "only" drop 30 percent in a bubble area like Boston. Any buyers in 2008 will almost certainly be underwater soon, even if they use 20 percent downpayment, which will of course be lost.

The only possible "sunshiny" response to this huge mess is that buyers who wait this out -- with a timeframe of a decade or more -- will probably not lose money by buying into the near-peak of a crashing bubble market.

Being our own Authority... What a concept..... Most of us have been deprived of this from at least since the age of 2.

Truth - the final frontier

Don't let anyone decide FOR you - Decide for YOURSELF