Suburban price cuts, FHA woes and other odds and ends
OK, time to clean house and clear out some odds and ends. Let's kick things off with some extra info on price reductions in the suburbs.
As I blogged last week, Trulia.com is reporting a surge this May in homes with price reductions across Greater Boston, with the total rising to 31 percent of the market, up from 26 percent in April.
Apparently we are a nationwide leader in the race to cut prices since the April 30th expiration of the home buyer tax credit, which, of course, took out a whole bunch of buyers.
Well some suburban towns are managing to top even that number.
At least 41 percent of Wayland homes on the market have at least one price reduction, while Medfield is not far behind at 40 percent. Concord and Newton both weigh in at 37 percent, while Sudbury, Waltham and Natick are in the 35 percent range. Rounding out the list, Franklin comes in at 34 percent, and Lexington at 32 percent.
When it comes to the size of the reductions, Sudbury is tops with an average cut of 9 percent, down to $846,421, followed by Concord, where an 8 percent cut has brought the average price down to $721,228.
One of our blog regulars forwarded on this link to a Times article that offers a grim warning of another housing meltdown in the works in Washington.
Freddie Mac reported a $6.7 billion first quarter loss and says it may need another $10 billion in taxpayer money as well. That's atop the $52 billion the federal government has already pumped into Freddie.
As you probably have already guessed, a startling rise in delinquent loans is helping fuel this latest mess - nearly doubling to 4.13 percent of Freddie's portfolio.
Speaking of meltdowns, one thing not covered in the article - and would be worth exploring - is the Federal Housing Administration's bet on home prices. I am drawing upon a story I read a few months ago, but apparently some of the FHA's own financial projections depend on home prices not taking another significant dip. Quite a bet, I would say.
Sorry, no action yet on reining in home bidding wars
I have to report few results so far in getting elected officials to weigh in on the idea that bidding wars for homes should be regulated. In particular, I am following up on idea promoted by Bill Wendel of the Real Estate Café that software should required that would allow bidders to see what others are offering and decide whether or not to match them. This would at least drive a stake through the use "phantom buyers" by agents to keep prices escalating. I have calls out to the leaders of housing committees in both the state Senate and the House. I have not called Barney Frank's office yet. Time for another push, I guess.
