Archive for the ‘Uncategorized’ Category

Real Estate Bubble? That May Not be the Question

“Are we in a real estate bubble?” can still be a nagging thought for prospective Jamestown home buyers. It turns out that it might not be the most relevant question.

When you buy a home in Jamestown, you commit to what is actually a two-pronged proposition. One part is ultra-conservative: its practical utility as shelter. Being master of the roof over your head doesn’t just let you feel like you have a grip on the future—it removes a sizeable chunk of the unknown from your family’s prospects.

It’s that other aspect of owning your Jamestown home (or a home anywhere) that can trigger hesitation. When all is said and done, this is also an investment vehicle—perhaps the largest most people will ever acquire. Although this aspect, too, is often considered to be quite conservative, within the past decade there was a time when common wisdom had it that buying homes was such a risky financial gambit that only the bravest (or wealthiest) were tempted to take the plunge.

So—which is it? Is it simply a 50-50 proposition—or is there a straightforward answer to whether buying a home in Jamestown is more of a chancy venture than a prudent one?

For the risk-averse, the good news is that history does give us a reliable answer—one that depends on just one qualifier. Owning your home is a high-risk investment only if the frame of reference is short term. Over the long haul, it’s about as conservative as an investment can get.

Here’s why. Last decade’s Great Recession—and the residential real estate bust which accompanied it—were preceded by what was unarguably a full-blown real estate bubble. All the earmarks of a real estate bubble were present, here in Jamestown, across the nation, and internationally.

For a buyer who purchased at the height of the bubble, the fall in value was precipitous. From 2007 to mid-2008, the drop in U.S. residential prices was nearly 33%—a plunge not seen since the Great Depression of the 1930s. For a buyer who had purchased at the height of the bubble, selling within a short timeframe could result in a significant loss. In that case, their investment would have been almost as risky as a stock market speculation (the S&P lost 50%).

Yet for homeowners who had no reason to sell, the actual dollar losses never materialized. By this time last year, buyers in most parts of the country were willing to pay prices that exceeded the heights of 2006. Inflation has had an effect—yet current moderate residential price rises have been outstripping inflation in recent years. In fact, last week the Economist found that “across America, prices appear to be at fair value when compared to their long-run averages.”

So the more important question may not be the one about real estate bubbles at all. It’s about whether a prospective home in Jamestown (or any other community) is intended as a short or a long-term purchase. In all cases, I hope you’ll call me to supply my experience and up-to-the-moment market insight.

 

Joan Parcewski, Realtor & Notary

LAER Realty Partners           http://www.JoanParcewski.LAERRealty.com

JParcewski@LAERRealty.com    cell 978-376-3978

Laer Realty PartnersJoan Parcewski Full Picture 102017

 

 

Top 4 Reasons Rental Housing is On the Rise

Whether you are investigating Burlington rental housing activity because you’re looking for an investment or just a place to rent yourself, it’s important to become informed about the state of play in rental housing as a whole. It’s a picture that has been changing rapidly—one that’s unlikely to slow anytime soon.

Much is being written about the growing popularity of rental housing due to younger buyers who either can’t yet afford (or simply choose to avoid) taking on the commitment that homeownership entails. But that’s not the only factor contributing to what amounts to a nationwide shift in rental housing’s popularity.

This summer’s in-depth study by the Urban Institute presented four points explaining why “renting homes is overtaking the housing market.”

Overtaking” may be an overstatement as it relates to today’s rental housing profile in Burlington, but there can be little doubt that the points are on target for the U.S. as a whole. It’s also inevitable that we can count on similar factors affecting Burlington’s rental housing future.

In brief, here are their findings:

  • Renter profiles are changing. Millennials are not buying their own homes as early as previous generations, and many in the 65+ set are choosing to rent. As expected, new immigrants continue to choose to rent.
  • Supply trails demand. High-end developments continue to monopolize new construction activity, neglecting the larger “more-affordable” sector.
  • Renovations are lagging. Under-repaired rentals have resulted from inattention by investors…but some great ideas are making rehabilitation more cost-effective.
  • Single-family rentals are becoming more popular. Multifamily projects have long been the focus of government programs, but that’s changing as single-family rentals leap in popularity.

It’s a cinch that both Burlington tenants and landlords will continue to be affected by the kind of national currents that continue to put pressure on housing costs—and rents. Against that background, the potential for Burlington rental housing candidates should be well worth a hard look where investment goals make it appropriate. I’m here to put my deep market knowledge and experience at your service!

Joan Parcewski, Realtor & Notary

LAER Realty Partners           http://www.JoanParcewski.LAERRealty.com

JParcewski@LAERRealty.com    cell 978-376-3978

Laer Realty PartnersJoan Parcewski Full Picture 102017

 

Four Tips for Burlington Homeowners Bracing for Winter

Officially, it may not be winter in Burlington yet, but the end of November is more than a signal to turn to the last page in 2017’s calendar. It’s definitely time for Burlington residents to secure their domiciles against the mercury drops Mother Nature will be providing sooner or later.

Even in places where a November heat wave makes it hard to focus on the inevitable onslaught of chilly weather, there are some household winter preparation tips that apply equally to all areas of the country. Here are four tips to benefit just about every Burlington household:

  1. Tune up the heating system. Instead of hoping that the heat pump or furnace will make it through another year on its own, a preventive tune-up will result in lower fuel bills all winter—not to mention saving you from becoming 15th in the repair line when it fails on the coldest night of the year (when else would that happen?).
  2. Check the “overhead” (that is, the roof, gutters, vents, and chimney). Clearing leaves, pine needles or anything else up there can reveal spots vulnerable to leaks—or breaks in flashing seals. Water damage is much more costly to correct than are small-area roofing fixes.
  3. Mow any remaining leaves. If your yard still has leaves, mow rather than rake them. University studies have proved that leaves cut into dime-sized pieces (which takes several passes) will settle among the grass blades, nourishing them throughout the winter.
  4. Eliminate drafts. Every winter, Burlington homeowners lose truly astonishing amounts of heat due to air leaks. In addition to testing windows for rattles and door jams for gaps, the Department of Energy recommends an exterior walk-around to inspect all areas where two different building materials meet. With a caulk gun handy, also check cable and phone line entrances and where dryer vents pass through walls.

Based on a prediction for low sunspot activity, this year’s Farmers Almanac calls for a chilly winter—while NOAA concentrates on the 70% chance for a La Nina (which might bring normal precipitation except in the drier South).

In other words, Burlington’s winter weather outlook is anybody’s guess.

The foolproof solution is, as always, to be well prepared. In addition to anxiety relief, a side benefit of a consistently well-maintained home becomes evident when you put it up for sale—which is also when you should give me a call!

Joan Parcewski, Realtor & Notary

LAER Realty Partners           http://www.JoanParcewski.LAERRealty.com

JParcewski@LAERRealty.com    cell 978-376-3978

 

Laer Realty PartnersJoan Parcewski Full Picture 102017

 

A Single Piece of Advice from Buyer’s and Seller’s Agent

The dual nature of Bedford real estate agents is unlike most other professions. A medical doctor who is a family physician in the morning doesn’t switch hats and become a surgeon in the afternoon—any more than a lawyer who pleads in court for a defendant can decide to become a prosecuting attorney that afternoon.

On the other hand, Bedford Realtors® may begin any single day in negotiations representing a seller, then spend the afternoon escorting a buyer client through a series of Bedford home showings. I’m happy to say this isn’t evidence of a split personality disorder. It’s perfectly normal: the Massachusetts real estate agent’s license I carry specifically permits me to perform as either a buyer’s or a seller’s agent. That’s noteworthy because each of the agencies carries distinct professional obligations.

The subject of the duality of being a real estate agent came to mind this week when I happened across an article on the topic of the 3 things you shouldn’t talk about with a seller’s agent. The author listed the 3 things: how much you like (or dislike) a house; the size of your budget; and (well, the last one wasn’t specifically what not to talk about)—just the advice to buyers to “let your agent do the talking.”

I can vouch for all three, but go it one further: the same real estate agent advice works for sellers, too. Your agent is there to expertly gather and dispense relevant information, at the same time preventing the divulging of any and everything that might weaken your side of the coming bargain. Doing so while maintaining a positive, upbeat tenor is an art—one that sharpens with practice. For sure it’s one place where there is no substitute for experience.

Whether your next Bedford real estate role will be as buyer or seller, I can be there to serve as your voice—as well to offer my experience, guidance, and advice you can count on. Call me!

Joan Parcewski, Realtor & Notary

LAER Realty Partners           http://www.JoanParcewski.LAERRealty.com

JParcewski@LAERRealty.com    cell 978-376-3978

Laer Realty Partners Joan Parcewski Full Picture 102017

 

Answering a Common Question: Mortgage Refi FICO Scores

If you use a credit card or Billerica bank checking account’s online system, you may have noticed the appearance of a free service: FICO score tracking. You find it as a clickable area with a link title like “Your FICO® score” or just “FICO®.”

For many years, each of the major credit reporting agencies was mandated by law to honor any consumer’s request for a copy of their credit scores—but it was a once-a-year deal. For access to regular updates, you had to pay for a subscription. Particularly for consumers working to improve their credit scores, the paid services became a prudent monthly expense. The arrival of anytime free FICO score reporting eliminated much of that need.

Of course, tracking your FICO score is only useful if you know how the lending institutions will view it—and the answer to that is anything but clear-cut. Not only does each lender has their own confidential requirements, but since there are three separate reporting agencies, Billerica consumers have three FICO scores (and they’re rarely the same).

Even so, let’s face it: the single piece of information most everybody wants to know is what FICO score is needed to buy a home? or to refinance a home? Even if the answer is imprecise, it’s human nature.

To quell that curiosity, at least one source is willing to report what amounts to an average of approximations: it’s called EllieMae®. Ellie is a company that serves banks, credit unions, and mortgage companies by providing a raft of automated tools—but those are for industry insiders. As a sideline, they also put out a monthly Origination Insight Report with statistics drawn from the home loans processed through their systems—including some that most future Billerica home loan applicants will be interested to learn:

Average FICO score for conventional mortgage refis closed last month: 732

Average score for conventional purchases: 752

Average for FHA purchases: 681

Average FICO score — all loans: 724.

Average time needed to close: 43 days.

The percentage of mortgage refis grew to 39% of all loans, probably because interest rates decreased “for the sixth straight month” to 4.2%. EllieMae reckons that constitutes “a new 2017 low”—something Billerica refi and home loan applicants will be interested to know!

Those bargain basement interest rates continue to create a terrific opportunity for Billerica real estate. Call me for a no-obligation discussion about how you might take advantage of the current real estate environment!

Joan Parcewski, Realtor & Notary

LAER Realty Partners           http://www.JoanParcewski.LAERRealty.com

JParcewski@LAERRealty.com    cell 978-376-3978

Laer Realty PartnersJoan Parcewski Full Picture 102017

 

A Single Underlying Factor When Applying for a Mortgage

Every mortgage lender develops their own unique guidelines for evaluating the factors contained in a home loan application. These may change from time to time so that their portfolios stay “balanced”—that is, so that the cumulative risk represented by the entire batch of home loans do not exceed the level of risk they wish to assume.

Potential Bedford mortgage applicants are bound to be curious about which factors are more or less influential for that decision. Their curiosity is why you can find hundreds of “Top 5” and “Top 7” lists of “mortgage application factors”—and why home loan originators pay top dollar to advertise on them.

Given that the factors mortgage companies examine are hardly secret, it’s not surprising that all of the lists are pretty similar. It’s also true that the individual factors all have something to do with a single underlying element. (I’d call it the “hidden factor” if it weren’t right out there in the open). Here’s a typical list seen as it relates to that single underlying factor:

  1. Down payment (underlying factor: size of loan). If, say, $50,000 will be available for the down payment, a $200,000 home loan would be easier to grant than one for $600,000. Many mortgage firms have relaxed their requirements—but inevitably look harder as a down payment percentage declines.
  2. Debt level; aka Debt-to-Income ratio (underlying factor: size of loan). Lenders analyze an applicant’s monthly cash flow to determine how much will be available to pay the monthly mortgage payment. The size of the loan—thus amount of the payment—determines if that’s easily doable.
  3. Loan type (underlying factor: size of loan). Conventional loans carry stricter qualifying factors than do other types. For instance, if the size of the loan is beyond the conforming loan limitation, jumbo loan requirements pitch in.
  4. Employment history (underlying factor: size of loan). Starter homes requiring smaller loans are often right-sized for younger borrowers with shorter employment records.
  5. Credit Score. Typical descriptions say things like, “Borrowers who need to finance more will need a higher credit score of 700 or above…” In other words (you guessed it), underlying factor: size of loan.

Success when applying for a mortgage loan does involve all these factors—­and more­­—but that’s just another way recognizing the common sense notion that home loans are granted to those who can demonstrate the ability to repay. The last time that notion was abandoned, the global financial crisis ensued.

The corollary for house hunters is equally clear: determine your comfortable budgetary range first­­­–then go out and find your new home. The mortgage lenders will fall into line—and I’ll be delighted to help!

Joan Parcewski, Realtor & Notary

LAER Realty Partners           http://www.JoanParcewski.LAERRealty.com

JParcewski@LAERRealty.com    cell 978-376-3978

Laer Realty PartnersJoan Parcewski Full Picture 102017

 

For Potential Billerica FSBO Sellers, Points to Ponder

It’s illuminating to visit For Sale by Owner websites from time to time to see if there are any new insights to be gleaned. True, as a licensed Billerica Realtor®, I’m not likely to learn much new when it comes to selling Billerica homes—but that’s not the motivation. Call it ‘opposition research:’ the reason is to uncover any areas where the services I provide aren’t superior to what a do-it-yourselfer can come up with on their own.

Here are some takeaways from the FSBO sites Google recently presented as the most frequently consulted sites. I’ve included my opinion about the pronouncements—either valid or less than valid:

Valid: Valuing your house is an important step toward FSBO success. Absolutely true, if “valuing your house” means incorporating the latest Billerica comparable sales adjusted for the features that make your property unique.

Valid but irrelevant: Your lender will more likely sell your mortgage to another bank, sometimes within the first 72 hours. Although this is sometimes true, it has nothing to do with anything a potential Billerica FSBO owner needs to worry about.

Valid: “This should be no cause for alarm.” The reason why the above pronouncement about mortgage lenders’ procedures is a non-issue.

Less valid: “[name of an online service] is a free tool that instantly estimates your home’s value…”   As has been shown time and again, automated systems (even the top 3 national ones) can come up with wacky valuations—it’s why they ask homeowners for corrections. Compiling a carefully researched, up-to-the-minute comparable presentation is only one part of what you can expect from any licensed Realtor. Both are free.

Less valid: Whether you list your home with an agent…or sell your house on your own, it is going to involve considerable effort on your part. More candid would be pointing out that the considerable marketing, advertising, and negotiating activities in addition to timely compliance with all legal and financial deadlines are parts of the considerable effort that your Billerica agent undertakes for non-FSBO sellers.

Valid: Another pricing [tactic]…is calling a real estate agent for a Comparative Market Analysis…the agent’s point of view could be valuable. I couldn’t agree more!

Billerica FSBO properties are commonly passed up by serious-minded house hunters wishing to avoid non-professionals in such a major transaction. Since those are the prospects sellers should try hardest to attract, that’s one point you never find on any FSBO web site.

In case you’ve been toying with the For Sale by Owner idea, I hope you’ll first give me a call for a no-obligation discussion of your property and goals—and what makes the most sense for you!

Joan Parcewski, Realtor & Notary

LAER Realty Partners           http://www.JoanParcewski.LAERRealty.com

JParcewski@LAERRealty.com    cell 978-376-3978

 

Laer Realty PartnersJoan Parcewski Full Picture 102017

 

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