7 Responses to “Fed’s Beige Book: Boston Residential Real Estate” »»

1. John Ford
   Comment by John Ford | 03/03/10 at 4:07 pm

   Mary, first I would like to say I really enjoy your comments. Your opinions always keep me questioning my thoughts and blog posts (which is a good thing). With that said, lets discuss the above blog post which was written as an independent analysis of our local real estate market from the Fed. Mary, could you please tell me what was stated by the Fed report that you disagree with regarding our local real estate market and tell me why.

   In the meantime, we can if you want, banter back and forth on individual condo sales.

   ps – I hope we’re still blog friends.

2. Mary
   Comment by Mary | 03/04/10 at 1:25 am

   John,

   Fair enough. Tell me why a slight uptick in Y-O-Y numbers (fueled by huge government give a ways) over the worst months in the history of credit should be viewed as a positive?

   Your BFF Mary….

3. John Ford
   Comment by John Ford | 03/04/10 at 3:45 am

   My point is directed at the doomsayers. I think 2010 will prove to be a better year for Boston condo sales over 2009. Even after the “government give a ways” expire. Would you agree?

4. Mike
   Comment by Mike | 03/04/10 at 4:02 am

   Hi John –

   It won’t take much for 2010 to be a better year than 2009 in terms of condo sales, so I agree with you. That being said, my expectation is that 2010 will continue to be well below “average” activity levels compared to history, with the earliest return to “normal” pushed off to late 2010 or more likely 2011.

   My reasons? Jobs and credit/interest rates. The jobs picture continues to improve, but that just means fewer losses, not jobs growth, which is what we need to put some purchasing power back in the hands of buyers.

   The down side is that once we see some healthy jobs creation (forecast for 3Q or 4Q 2010), the Fed is going to work to take some money out of the system by removing liquidity and pushing up short interest rates (which are close to 0 right now). Estimates I’ve seen show that as adding 0.50% to mortgage rates as a base case. If rates go up higher, it will not be good for prices.

   The two wildcards appear to be seller volume (i.e., is there shadow inventory to come flooding into the market?) and mortgage rates/accessibility. Let’s hope those don’t become problems.

   Mike

5. confused
   Comment by confused | 03/04/10 at 4:10 am

   John,

   Why are people who want reasonable housing prices doomsayers? I think you spun that one.

   And I know I wasn’t invited but, I object to classifying increasing home prices as an improvement.

   Did you know that in February 09, Suffolk county had 77 homes entered into the foreclosure process? This year it was 243….or almost a four fold increase. The same is true in Middlesex county. Go to masslandrecords, check it out.

6. John Ford
   Comment by John Ford | 03/04/10 at 4:29 am

   Confused, you are always invited to the conversation. Second, with regard to my doomsayers comment I was referring to “sales” increases not “price” increases.

   The trurth of the matter, the more “reasonable” prices are the more I sell. So I think we have an agreement.

   I didn’t check the Masslandrecords but my guess is that 90% of these foreclosures are in Dorchester and not in the Boston proper area. I will also bet these were exotic loans that were given to individuals who should never of received them to start of with.

7. John Ford
   Comment by John Ford | 03/04/10 at 4:36 am

   Mike, in reference to the two wildcards I don’t see shadow inventory being a problem except perhaps in the Dorchester area.

   On your second point,”mortgage rates/accessibility.” This one really concerns me. And as I stated before this is the only reason I’m NOT declaring that Boston condo prices will be going up this year.

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