The figures are in for 2016 for Single Family, Multi Family, Condo, and Single Family $1M+ property sales. It makes for very interesting reading. You will find all the reports at the end of this newsletter. Note worthy points:
- Gloucester has seen a steady increase from 2014 to 2016 in units sold, dollar volume, and sales price to original price ratio in all segments except $1M+ single family and multi family properties. There is a corresponding decrease in days on market as well. It is a Sellers Market.
- Rockport on the other hand has seen mixed results segment to segment. The main factors are 1) lack of inventory, 2) pricing and 3) condition. Much of Rockport’s inventory is older homes requiring significant updating. Buyers are pushing back on that if the price is also high.
High End Market—Properties Over $1M
The $1M+ market segment in both communities is softening with a higher percentage of homes remaining unsold. In Gloucester this year only 34% of properties sold; in Rockport only 36% of properties sold. There were a total of 71 million dollar homes on the market in both communities and only a total of 25 sold. Many sellers are facing the fact that today’s buyers are not all that enthusiastic for 3000+ Sq Ft homes. High-end buyers are looking for more flexibility and are coming back into the second home market by purchasing smaller (2000—2500 Sq Ft) homes and then adding a vacation/winter property which can be rented when not in use by them. This was not the case during the recession but I see it coming back into vogue now.
I know that Rockport really wants more young families in town but the current inventory is out of their reach. But, you can find in Gloucester a single family home that’s on the market for $324,900. It has 3 bedrooms, 1-1/2 baths, on 11,000+ sq. ft. lot near conservation land, recently connected to sewer. It needs some work but is basically solid. A down payment of $10,000 on a 30-year fixed mortgage at 4.325% rate (but not including PMI) would generate a payment of $1857 per month (including escrowed real estate taxes). This is within the budget of many young families. This is one of five 3-bedroom homes in Gloucester that are under $350,000 that are within the budget of a young family.
In comparison, there is only one home in Rockport (a 2-bedroom home) that is on the market for under $350,000 (it’s listed just under $300,000). There are two more (both on Long Beach) between $350,000 and $450,000 on the market with 3 more that are under contract. One of which is the house at 4 Pleasant Rd that just went under contract after 7 days. Asking price was $438,800. With a down payment of $21,940 (5%) on a 30-year mortgage at a 4.325% fixed rate, you would face a $2,358 monthly payment (including real estate taxes but no PMI). PMI (private mortgage insurance) would add a few hundred more each month to the payment. That is beyond many first time home buyers.
The lack of inventory in Rockport will keep pricing beyond the reach of most average young families which will continue to accelerate the change in the character of the town. Without more inventory in the $300K to $400K price range the situation will not change.
As predicted, mortgage rates have increased and, with an improved business climate in 2017, will continue to rise. Most industry experts expect mortgage rates to rise to between 4.3% to 4.5% by the end of 2017. That is still a reasonable rate for those of use who remember the days of 12% to 15% rates. Except, back then, pricing was in the $200,000—$250,000 range for a lovely home. Another fact of interest is the FICO score that lenders want to see. Conventional mortgages like to see score of around 753, FHA is 686, VA is 709. The higher your FICO score the better the interest rate you will receive.
Always, always, always go through the preapproval process before beginning your property search even if you have a home to sell. So many things have changed in the last 10 years that you want to be sure you understand the current process thoroughly before beginning your search. You will save yourself much disappointment.
Spotlight on my Business Directory
I encourage you to use my business directory to find help with your property issues. Here’s a few businesses that have helped my clients recently:
Katherine McNally of Guaranteed Rate: Katherine has been in the mortgage business for years. She’s an expert at what she does and Guaranteed Rate has a slick program which keeps you up to date on the status of your loan processing. She’s very knowledgeable on the large number of programs the company offers and she takes a personal interest in her clients. If you know any young buyers, have them contact her and inquire about a renovation loan. Sometimes it’s the prefect solution if a property needs some immediate repairs.
Daniel Croce of Advantage Pest Control: Every once in a while homeowners have a need for pest control—ants, mice, bats, etc. Dan’s company has a long record of dealing swiftly with the annoying critters and he has plans for ongoing maintenance. My home is set back from the road on the edge of woods and I have always had to spray for black ants. Any now that I don’t have a cat, I’ve had to treat for mice as well. The hawk that used to visit us on a regular basis has been decided to seek other areas apparently and this year I was overrun with squirrels (that stayed out of my house) and mice which did get in.
You will find contact information for these companies as well as many others in the Business Directory that is located on my website at www.bettypool.com.
One More Thing...
I wish each and every one of you a wonderful New Year of 2017. Let’s put 2016 to rest and move on to make 2017 the best ever. Help one another, be kind to one another, and reach out to those who are in need. Do that and 2017 will be the most rewarding year.
I welcome your feedback on this newsletter and I am never too busy for your referrals.
Email me at betty@BettyPool.com or call at 978.290.1736 (cell). Visit my website—http://www.BettyPool.com.
RE/MAX Advantage Real Estate — 224 Washington St, Gloucester, MA 01930 — 978-283-8005