New guy on the blog
Hey everyone, Scott here, the long-awaited successor to Stacey and Binya.
For those who don’t know me, I have been writing about real estate in the Boston area for 17 years now, including the last eight at the Boston Herald. Now I am a freelancer.
I can even remember back to the late great real estate downturn of the early 1990s.
A cub reporter at the Haverhill Gazette, I got a crash course in bank failures and development projects gone bad.
I won’t ever forget the “developer’’ who turned up at the newspaper for an interview, his shirt stained with his breakfast. He had built an office mid-rise by a field off some country road in New Hampshire. He was amazed he couldn’t find any tenants. I wondered who in the world lent money to this guy.
It all sounds kind of familiar, doesn’t it?
The same cycle has spun around again, but this time the crash is global.
And instead of a lot of loony office projects, we’re stuck with a foreclosed ranch, triple-decker or condo complex on every other corner.
There’s a lot happening in Washington and the State House that will potentially reshape the real estate market for years to come. And there will be much to write about there. Hey, there’s a new foreclosure rescue plan every other day now. But I want to talk about anything and everything related to homes and real estate, not just public policy issues.
So let’s get the ball rolling.
Renovation is a hot topic for me right now. I frequently question my sanity these days after embarking on a major addition to my home. Back when housing prices were rising, adding on was a slam dunk. Not much so now.
But I am constantly interested in what it’s like to buy and sell in this market. What does it take to get a deal when prices are falling, but many great homes have been pulled from the market? For that matter, what do you have to do to sell your house in this market? Especially if you are not living in a coveted suburb such as Brookline, Wellesley or Newton.
For that matter, how does anyone get a mortgage these days, as in post stock market crash? I won’t shed any tears for the subprime market, but where do you go if your credit isn’t spotless? Then there are timeless questions of going green versus being a retro rebel, whether new construction really trumps old, and whether it’s worth it to splurge on granite versus sticking with good old Formica.
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Welcome Scott -- I also see your name regularly in the Banker and Tradesmen pages on real estate and banking issues, and I look forward to your posts. On that topic -- what do you think Mr. Paulson is thinking?
Scott,
I'm looking forward to your insight and analysis concerning the real estate market, in particular the market in and around Boston. Hopefully we can all share some informative opinions, analysis, and information concerning the RE market. With that being said I want to first address the question you asked: What does it take to get a deal when prices are falling, but many great homes have been pulled from the market? Answer: another 15-20% off today's current prices because I believe asking prices are still overpriced based on historical RE fundamentals, problems with the local and national economy, job layoffs locally and nationally, increased personal debt, historically low personal savings, historically high foreclosures that still show no sign off residing, credit crisis, and the increasingly high cost of living outpacing wages. 2009 will be a very interesting year because I also believe that price declines will accelerate at a higher pace in the more "coveted" towns as well.
Scott,
You seem astute - mostly. But the talk about the man's stained shirt seemed gratuitous. Maybe he was suffering some business or emotional problems? Frequently those who suffer don't pay much attention to their appearance, as it is the last thing they are thinking about. I hope your new blog shows some compassion to those in this downturn.
Welcome scott, i am involved with real estate also. I am a landlord and i own two condos. one i live in and the other is rented. origially i was going to sell the two bedroom condo to downsize, but that didn't work out and now the market is not good so i can't sell it so it is rented and i am paying my bills but i know my credit is not too good. I would say in 6 years I will be debt free. from pam in lynn, mass
Hi Scott, I am totally new to this but getting a mortgage didn't seem to hard to me, however their mistakes are giving me a headache and I'mnot sure what recourse I have. I basically refinanced to pay off debt, the underwriters screwed up and didn't look into my flood insurance. I had already paid my yearly rate, signed all the paperwork and mailed the checks to my creditors , then I get the call. Mind you I was comfortable with my payments. So we figure it out, I am paying the difference, they are refunding me the cash, but guess what they now want me to pay an additional amount for the paperwork, which I am fighting. I'm pretty mad
sometimes you just don't have time to go home and get another shirt.
I'm afraid of putting money into my house too. We decided that we're not going to try to sell our house now because it would be too difficult. But we really need to do a major kitchen overhaul and some other stuff or we're going to go insane (kitchen is NASTY). I'm very afraid that when I go to sell the house in 4 - 5 years, I won't get that money back. But try telling that to my wife.
Scott,
As we both know, being a successful developer means understanding business cycles and when not to leverage to the max. Most could have selected the option on their loan(s) for the Interest only, 40 year note . . .
I see real estate becoming even more illiquid- if you don't have to sell, why bother? You can just live your life and wait to sell years down the road
Scott, do you have a website that shows the range of PMI? I understand it can be based on loan-to-value ratio, FICO score, etc. But what is "average"? Is there a discount % for an FHA loan? And is it much more difficult to get around PMI with a piggy-back mortgage?
reindeergirl -
the guy in question (in the early 90s) built an office building on spec in the middle of nowhere and wondered why he couldn't get tenants. It didn't help matters that he apparently didn't present himself in a professional way. If you're trying to 'sell' a product, in this case, not-very-desirable office space, wouldn't you look professional and competent? Not stained with ketchup?
Compassion, emotional problems...whatever.
Scott,
Welcome. Please keep us abreast of any news related to the new Filene's, or One Franklin as it is being called. We simply cannot have a huge hole in downtown. Thanks.
I find vindication as a real estate appraiser who got out of the business in 2000 because I could not practice ethically and compete with many others who were fast and loose on their appraisals. We will not see stabilization until everyone learns that buyers need at least 10% and preferably 20% skin in the game. Right now, you can get an FHA loan with 3% down. We are just accumulating more future failures. There is only one way to stabilize the market. As done with the S & L fiasco, everything needs to be fire-sold at auction. Banks are holding assets because they cannot afford to sell them and report the loss. Until this firesale occurs, I don't see a bottom occurring. Also, the only way to clean up the appraisal problem is to require the sellers of loan to keep skin in the game, not using other people's money. Then and only then will people do responsible lending. Right now, using the FHA, crappy loans are being dumped on us as taxpayers!
Quite a diverse group of responses and prognostications to your post! Weren't you at the BBJ for a while too? What is your focus on real estate for this blog? General, covering almost anthing, residential, commercial?
If you are planing on talking rennovations and old vs. new, don't forget lead paint laws and issues!
Hi Scott! Welcome, I am new to the real estate blog world myself and have noticed your work in several publications. I look forward to continuing to follow your stories. -E
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