Boston Real Estate Blog

John Ford Realty
137 Charles Street, Boston
151 Tremont Street

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Radar Logic creates index to track housing prices in 25 markets; better than Case-Shiller

Last week I had the pleasure of finally meeting Jonathan Miller, co-founder, principal, President and CEO of residential real estate appraisal firm Miller Samuel, co-founder and managing principal of commercial real estate appraisal firm Miller Cicero, writer of the Matrix real estate blog, and, now, co-founder employee of Radar Logic.

Radar Logic is a new company focused on analyzing the real estate sales market on a local and national level.

It’s first product, the Radar Logic Index (RPX), is “a single, statistically accurate value representing the price per square foot paid in a define Metropolitan Statistical Area (MSA) on any given day.” The index will cover 25 MSA’s, at first.

Again, it will be updated daily. This is unheard of.

As well, they will produce three daily price values based on daily, 7-day and 28-day time periods.

From what I understand, the Radar Logic Index will be a measured improvement from what is currently available.

The much-vaunted S&P/Case-Shiller Home Price Indices, by comparison, only includes resale data when calculating market values; RPX, by comparison, includes both new and existing home sales. Oh, and the Case-Shiller indices only include single-family homes; RPX includes single-family homes and condominiums (and co-operatives?).

The company’s announcement hasn’t received much press, yet. (I guess the media can only handle one real estate story a month?)

I expect that to change, very soon.

Globe breaks story we already knew about …

So, the Herald is going to sell its building and (more lucratively) its six-acres of land.

The Globe story on the announcement includes this paragraph:

Other developers are also looking at the neighborhood. A city official who requested anonymity because no official action has been taken said developers has shown the Boston Redevelopment Authority a preliminary proposal at a neighboring site, at 275 Albany St., to build a 25-story complex with 290 housing units and a 150-room hotel.

It makes it sound as if it’s a secret what’s going on around there.

Um, no.

The property at 275 Albany Street is the <<< parking lot next to the >>> old (1970) Teradyne building, sold last year to Normandy Real Estate Partners.

Everyone assumed it was going to be redeveloped.

Mostly, because that’s what the developer itself has been saying on its website:

275 Albany Street
Boston, Massachusetts


* This 1.27-acre site is slated for a mixed-use development with a hotel, retail, and rental apartments
* Located in the SOWA district, which features many loft-style condominiums, art galleries, bakeries, trendy eateries, and retail
* Boston Convention Center and the Seaport District are just 10 minutes away
* MBTA Silver Line is just 1 block from the property

Summary Description

This mixed-use development site, ideally located in downtown Boston, will offer spectacular views of the Financial District to the North, Back Bay to the West, and South Boston and the waterfront to the East. Located in this trendy, upscale area, just 2 blocks south of Washington Street, the property provides access to buses and is just 7 minutes to the BU Medical Center. The site is directly adjacent to Route 93 and the Mass Pike, so visibility and access will be exceptional.

ZipRealty agents make less than you might think (and less than they would prefer, most likely)

Buried in an Inman News story about ZipRealty’s second quarter revenues was this morsel:

The company employed 2,070 agents as of June 30, up 24 percent compared to its agent count at the close of second-quarter 2006. ZipRealty’s value of real estate transactions closed climbed to $1.41 billion in second-quarter 2007, up 10.6 percent compared to second-quarter 2006 …

… Average agent productivity is expected to be approximately 0.6 to 0.7 transactions per agent per month, with average net revenue per transaction of about $6,500 to $7,000.

Wait, what?

Average agent productivity is 0.65 transactions per month???

I think that’s a low average, and especially low for a company such as ZipRealty, whose business model seems to be based on quantity, not quality.

I’m just sayin’ …

Source: ZipRealty announces $1 million Q2 loss – Inman News (may not be available without subscription)

Partially-inaccurate information on Globe’s real estate blog

Well, I hesitate to mention it, at all, but in the end figured it was alright to say something.

The other day, someone on the Globe’s real estate blog a real estate agent wrote the following:

The opposite of “subprime mortgage” is not “prime mortgage”; it’s a “conforming” mortgage. To get a conforming (or conventional) loan, borrowers must conform to rigid standards developed by mortgage lenders. These standards are not exact; there is some judgment involved. An applicant is judged on these factors: income to support the requested mortgage plus all other debt the borrowers has outstanding, credit history, job stability, and assets.

Not really.

First off, a “conventional” loan is not the same as a “conforming” loan.

A conventional loan is one that is not backed by the Federal Housing Administration (FHA) or Veteran’s Administration (VA).

Conventional loans are secured by government sponsored entities or GSEs such as Fannie Mae and Freddie Mac. Conventional loans can be made to purchase or refinance homes with first and second mortgages on single family to four family homes.

Conventional loans may be conforming or non-conforming.

Second off, while there are other criteria that makes a loan “conforming” (as the writer says), the most important one (and the one she didn’t mention) is that a loan is only conforming if it is within Fannie Mae and Freddie Mac loan limits.

In general, Fannie Mae and Freddie Mac’s single family, first mortgage loan limit is $417,000 … This limit is reviewed annually and, if needed, changed to reflect changes in the national average price for single family homes. The current loan limit applies to all conventional mortgages delivered after January 1, 2006.

(The limit wasn’t raised in 2007.)

Nonconforming loans — instruments which don’t meet Fannie Mae or Freddie Mac qualifications — are also considered conventional.

Another category of loans, jumbo loans, falls outside of Fannie Mae eligibility but is also considered conventional. A jumbo loan is a loan that’s too large to be eligible to be traded by the two main loan purchasers.

So, a jumbo loan may be considered “conventional”, but it won’t be “conforming” because it won’t be sold on the secondary market by Freddie Mac or Fannie Mae. (I’m under the impression that these jumbo loans are actually sold, but not sure how the process differs from conforming loans.)

I hesitated to mention it, first because I thought it bad behavior, second because I am never sure I get my facts right!

( ** Loans made in downtown Boston, therefore, are often “jumbo loans”, since the amount borrowed is higher than the set limit of $417,000. Jumbo loans often have higher interest rates than traditional mortgage loans – because of the added exposure to the lender, and because of the added risk to the buyers on loans on the secondary market. Or, either. Or, both.)

Bottom line: Ask your mortgage broker.

Breaking … Boston Herald building sold; redevelopment planned …


National Development, Purcell to redevelop Herald site – By Scott Van Voorhis, The Boston Herald

Boston Herald property sold – By Christopher Rowland, The Boston Globe


( ** Reports say that the Herald owns 6 acres of land – what’s unclear to me is what this includes. The Herald building, of course, but what about the parking lots – not just the one next door, but the one across Traveler street.)

Mortgage loan rates not rising for borrowers with excellent credit (i.e., not you)

I’m joking!

Interesting set of data released by Jack Guttentag, the self-proclaimed “Mortgage Professor” shows that mortgage loan rates for the best-rated borrowers haven’t gone up during the past three months.

For the typical borrower, however, rates have increased, and may be going higher.

Basically, he looked at rates in early May, and compared them to rates today (actually, as of August 3rd). (His data is not all-inclusive, but gives a general idea of what is going on.)

On “cream-puff” loans, interest rates rose by about .4 percent between May 4 and Aug. 3. On some programs it was a little more, on others a little less, but the dispersion was small.

(A cream-puff loan is one with a 20 percent down payment on a $500,000 single-family home purchased as a permanent residence, by a borrower with a credit score of 720 or more, who fully documents income and assets, and escrows taxes and insurance.)

However, those looking for loans who had lower credit scores were paying substantially more than they were, just three months’ ago.

On scores ranging down to 680, rates on Aug. 3 were about .4 percent higher, but at 660 the increase was .56 percent and at 620 it was 1.4 percent. Below 620, there were no quotes on either date, that’s subprime territory.

I also looked at rates on loans of different sizes on May 4: the sizes were $75,000, $417,000, $418,000 and $2 million. The two middle sizes distinguish loans that can and loans that cannot be purchased by the two federal agencies, Fannie Mae and Freddie Mac. The rate increases, starting with the $75,000 loans, were .41 percent, .45 percent, .74 percent and .8 percent.

Basically, no surprises. Those who are more at risk of defaulting will have to pay more, now.

But, Professor Mortgage says there is no sign of a “mortgage meltdown”. Those who want to borrow, still can.

More: Is mortgage market veering toward meltdown? – By Jack Guttentag, Inman News

Globe comes out against new rent control plan … and suggests something worse

Eh, what can you do?

So, Sam Yoon, reckless young city councilor, has proposed a new plan to encourage landlords to negotiate rents with their tenants. Encourage, by which I mean “force”, since if a landlord chooses NOT to meet with their tenants, a letter will be entered into a file (permanently) at City Hall, which would be used against them, should they ever need assistance from the city, at any time in the future.

It’s a terrible idea.

Fortunately, it appears to be going down for the count (the Boston City Council is scheduled to vote on the plan, tomorrow).

The Globe came out against the plan, today.

Instead, they suggest another rent control proposal, this one even worse than what Yoon wants.

Boston could have benefited from a reasonable rent stabilization bylaw like the one proposed in 2004. It would have allowed low-income and elderly tenants only to appeal annual rent increases above 5 percent. The proposal thoughtfully exempted all construction from 2002 forward to encourage new supply. It got shot down by the City Council. But it stood for something tangible.

There are still ways to help needy tenants or expand the number of affordable apartments in Boston without adopting rent controls. Barry Bluestone, director of the Center for Urban and Regional Policy at Northeastern University, recommends a housing voucher finance system similar to the one in Illinois, where officials assess a $20 fee on most real estate transactions. Bluestone estimates that the state could set aside more than $10 million annually for such a trust fund. Another solution might be for Bostonians to subsidize the construction of more inexpensive housing by adopting a small surcharge on property taxes through passage of the Community Preservation Act.

“Bostonians could subsidize the construction of more inexpensive housing by adopting a small surcharge on property taxes …”


In an indirect way, anyone who buys a condo in Boston, today, already subsidizes the construction of inexpensive housing. There is a 13% affordable housing clause in most residential construction which forces developers to offer condos in their developments at below-market rates (way below-market rates). This does nothing but increase the cost of housing for the “rest of us”.

Has this “affordable-housing” plan done anything to mitigate the high cost of housing within the city?

No. Nothing.

I don’t support the Globe’s proposal to limit rent increases to 5% for low-income and the elderly – no one’s proven to me that it’s a requirement. (The Globe says we need rent control to make rental housing more affordable to middle-class residents, but then says we need to create rent control for the low-income and elderly … who’s left???)

On the other hand, assessing a small fee on each real estate transaction has at least some merit, in my opinion. I don’t like the idea of having it assessed and collected by the state, however; I don’t think we’d end up seeing any effect in Boston – certainly, collecting $10 million across the entire state isn’t going to be enough to build a new mid-cost apartment complex in Boston.

The trouble with ideas such as the Globe’s (and Yoon’s) is that they are proposed by people without the knowledge and experience necessary to make the plans reasonable and logical.

Eh, what can you do?

More: Room for rent improvement – The Boston Globe

Did many people respond to my survey?

So, one of the blogger panelists here at the conference said it was a good idea to post your blog entries in the form of a question. It helps with the search engines.

Anyway, just a quick update. Over forty people responded to my survey. Thank you so much.

It seems as though people are happy and find lots of useful information on this site.

The over-achiever in me was disappointed with the grading (I’d say it averaged out to around a B or B+) but I’ll try to not hold a grudge.

Have you checked out

I just heard about this website called “”.

It’s a social networking site … oh, god, another one?

Anyway, moving on, here’s their deal:

Going helps you find fun things to do and fun people to meet.

* Ever wish there’s one place where you can find all the events around town?
* Want to know whether an event is worth going to and see who else is interested?
* Looking to meet some new people who are up for doing fun things?

We felt the same frustration and decided to do something about it. The result is Going: we now have hundreds of events a day and thousands of people who are up for doing fun things.

How it works

* Find something fun you’d like to do. We have tons of ways to help you do that, such as by popularity (how many others are interested), by time, by distance, or using our Editors’ Picks.

* See who else wants to go. Don’t be shy; people are meeting up to go do stuff all the time. Feel free to post a message for the event to see who else’s up for meeting up.

* Find fun people who share your interests. Look up groups that sound interesting and say hi. See who’s similar in interests, then post a comment or send them a friend request. Most people are pretty friendly.

* Come to a Going party. We have parties every month for people on the Web site. It’s a great way to make a lot of friends in a jiffy. Hope to see you at the next one!

They’re active in four cities, including Boston, and are planning on growing quickly, over the coming months.

I don’t know. Sort of a good idea. But, of limited use, right?

I always figure, if you like doing something (snowboarding, seeing James Blunt (ick), etc.)you’ll already know when events are taking place. Like you need strangers to keep you informed?


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