What Can You Expect?

The two most frequently quoted constants in life are death and taxes. Two more things would-be homeowners can expect in the near future are increases in mortgage rates and housing prices.

Interest rates have been kept artificially low for several years by the Federal Reserve in an effort to strengthen the economy. Policy is shifting to allow them to seek their own natural level and that will surely result in higher mortgage rates. Rates on 30 year fixed mortgages are up over 1% from January, 2013.

Foreclosure activity is down, new home starts are up and prices have been increasing in most markets for two years. Most experts agree that the cost of housing is going up.

If the price were to go up by 2% and the mortgage rate by 1% while a buyer is “sitting on the fence” making a decision, the payment would go up by almost $175.00 each and every month for the term of the mortgage. Even if a person can afford to make the higher payments, what could they have done with that extra $175.00 a month? Buy furniture? Car payment? Principal reduction?  Retirement contribution? Save for a rainy day?

Click here to determine what the cost of waiting to buy will be using your price home.
















Inventory is extremely low in most towns; only 44 single-family homes for sale in Sudbury, 17 in Wayland; and 15 in Maynard. I will be posting and emailing market updates in the next day or two.

Low inventory makes this a very good time to put your house on the market before the spring becomes more competitive as more people decide to sell. And you will have the edge on other buyers who still need to sell in order to move forward.

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Equity Dynamics

Equity is the difference in what your home is worth and what you owe. Ideally, as the value goes up and the unpaid balance goes down with each amortized payment made, the equity grows from two directions. This dynamic leads to increasing a person’s net worth much faster than many other investments.

A homeowner has minimal control over value. It is necessary to maintain the property to avoid depreciation and make good decisions on capital improvements. After that, appreciation is generally controlled by supply and demand and the economy.

Mortgage management is something that the homeowner does have control. Making the decision to select a shorter term mortgage at a lower interest rate can have an impact on equity build-up. Lower interest rates amortize faster than higher interest rates which will also affect equity growth. Currently, it is possible to get a 1% lower rate on a 15 year mortgage than a 30 year mortgage.

Compare two alternatives of a 30-year and a 15-year mortgage. The payments will definitely be higher on the shorter term because it pays off quicker. However, if a person can afford the higher payments of $362.53 more per month in this example, the equity will be greater. Even after you take into consideration the higher payments, the increased equity is $17,236 at the end of the seven year holding period.

Another decision that can affect equity build-up is making additional principal contributions along with the regular payments. Whether you’re making an occasional lump sum payment toward principal or regular monthly contributions, it will save interest, build equity and shorten the term on a fixed rate mortgage. Estimate your personal savings with this Equity Accelerator.

After increasing for the past few months, interests have started to go down again making this a good time to refinance if you have been able to already. The combination of higher selling prices and lower rates may be enough to make refinancing an option. Lower mortgage rates also make this a good time for first-time buyers and move-up seller/buyers. Inventory is still low; however, market time for many of the homes is increasing and most sellers would like to sell before winter. Contact me if need help with buying, selling or both or if you would like a referral for a lender to refinance.
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Market reports for Wayland, Sudbury, Maynard, Concord, Stow MA

Wayland Housing Market Update - What's It Mean to You?

Happy First-time Homeowners in Wayland!

June Closed Sales: There were 18 closed single-family home sales during June in Wayland compared with 23 in June 2012. Sale prices ranged from $390,000 to $1,220; the median sale price was $669,500, up from $507,000. The average sale price was $731,972, also up from June 2012 when it was $594,000.

Keep in mind that it takes approximately 30 to 60 days to close a sale. The buying decisions for properties that closed in June were made in April and May at the peak of the Spring market. Summer is a different market.

New listings in June: the number of single-family homes that came on the market in Wayland during June was almost the same as in June 2012 – 23; 22 in June 2012. Of the 23, there are only 9 that are fully active. 2 have accepted offers with contingencies waiting to clear, 10 are under agreement, 3 have already closed, and one of the listings has expired.

Current: As in most places, there are fewer homes on the market than last year at this time (8/1); there are 64 single-family homes for sale compared with 79 on 9/1/2012. List prices range from $219,900 for a 5 room house with 2 bedrooms and 2 bathroom to $11,800,000 luxury estate with 28 rooms including with a guest house, and barn on 11+ acres surrounded by conservation land. See the listings at www.WaylandHomeSales.com

The current median list price in Wayland is $822.000; last year on 8/1 the median list price in Wayland was $735,500. As in Sudbury, the price range with the most choices is one million to 1.499 million – there are 13 for sale. The average time on the market for these properties is 140 days; some of these sellers may be ready to make a deal and buyer, you have less competition - everything is on sale in August!

Condominiums (townhouses and garden-apartment style): There were 4 closed sales of condominiums in Wayland during June; there were 10 in June 2012. Sale prices were higher this year. The median sale price in June 2013 was $500,000 up from $456,250 in June 2012.

Current: there are 16 units for sale in Wayland compared with 34 last year at this time. List prices range from $279,900 for 3 bedrooms, 1 bath half-duplex, to $1,199,000 for a 3 bedroom, 3.5 bath luxury townhome at The Field. The median price for a condominium in Wayland is $662,450 up from $665,000 on 8/1/2012.

What's it mean to you?Price is key even in a hot market. Homes sellers who price their houses correctly are getting offers, multiple offers in some cases, and are selling quickly, sometimes for over asking; while those who were overly optimistic and went on the market too high are taking longer and they are reducing their prices. There were 23 price changes on 21 properties in Wayland during June. The average change was -4.26%.

People who are serious about buying are prepared and acting quickly, especially any who’ve already missed out on a house they wanted. Being prepared is more important than ever, however, it is still important to think things through and not to make costly mistakes like waiving the home inspection or offering more than you can comfortably afford. Contact me if you want an experienced buyer agent/broker to navigate you through the process. My clients have been able to get the house they want without over-paying.

For people who own a home and are not planning to move anytime soon, higher sale prices mean more equity in your property. Maybe you've been trying to refinance or take out an equity line to do some updates but your house wouldn't appraise. Mortgage interest rates are still historically low and this may be your window of opportunity. This is also a good time to consider a vacation home or income property. Prices are going up everywhere so why wait?

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Want to know more, call Marilyn at 508-596-3501.

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If I'd Known...

We’ve probably all said or at least thought “if I knew then, what I know now, I would have done things differently.” We should have stayed in school longer. We should have listened to our parents. We should have bought Apple stock in 2002 for $8.50 that sells for $400 today. Or we could have bought gold in 2000 for under $300 for a four-fold profit today.

Years from now, if we look back at 2012, we may say that it was the best buyer’s market ever. Even now, in 2013, it’s apparent that both housing and mortgage prices are going up and they may never return to the record low levels.
The housing affordability index, which is considered to be good at 100, had increased to over 200 this past December, January and February. Shrinking inventories and rising prices in most markets have caused the index to fall to 172.7 for May 2013.

This market applies equally to acquiring a home to live in or a home to use as a rental. It is estimated that about 30% of the property purchased last year was done by investors. It is understandable because the positive cash flows far exceed most other investment alternatives.

Homeowners moving up in a rising market may sell their home for more by waiting but it will also cost them more for a new house. Typically, a person buys a 50% larger home when they move up. If they wait for prices to go up 10% on the $150,000 home they're selling, they’ll realize $15,000 more but will pay $22,500 more for the new home purchase. They’ll actually net $7,500 less by waiting for prices to go up and may have to pay a higher mortgage rate too.

The question homebuyers and investors alike are faced with today is whether they will be saying years from now that they seized or missed an opportunity of a lifetime.
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NOTE: Housing prices are examples taken from national stats. The prices in Concord, Wayland, Sudbury and the suburbs west of Boston are substantially higher, however the principle concept in this post still apply.

View market reports, search for homes and sign up for MLS listing updates go to www.MarilynMessenger.com or call 508-596-3501.