Eric Helmuth, who contributes to Boston.com’s Boston Real Estate Blog Now Blog, recently closed on his purchase of a home in Arlington.

Coincidently, Arlington was the focus of a Boston Globe article on pockets of strength in the local real estate market.

Welcome to Arlington, which is enjoying its own housing bubble while many other communities in Eastern Massachusetts struggle with declining sales and prices. Despite spiking foreclosures and subprime sorrows nationwide, real estate in this suburb northwest of Boston remains freakishly hot. Prices are stable, activity is brisk, and frenzied behavior not seen since the boom years – deliberate underpricing to fuel bidding wars, multiple offers over asking price, tight deadlines for submitting offers – is often routine.

According to Mr Helmuth, he encountered this phenomenon when he and his partner were out, house hunting.

Overpaying is still dangerous. We also saw deliberate underpricing going on here, and in fact lost one house to buyers who paid about $20,000 over what the house was likely worth.

But, not everyone is weathering the housing market so well.

For instance, [A]sk the lovely people who sold our house to us. They took a $25,000 loss from what they paid for the place in early 2006. That’s a lot of money to owe the bank at closing, and we felt for them.

Yes, they did. The public record shows the previous owner paid $615,000 for the single-family home in March, 2006. The current owner closed for $590,000 in August, 2007.

Add in the commission the seller probably paid, almost $30,000, and the seller ended up losing $55,000 on the deal.

Now, two things.

First, the previous owners only closed on the purchase of this house, a year ago. While we would all hope (and/or, wrongly assume?) that real estate prices would increase every year from now until Armageddon, in reality, it’s just not so (was it ever?). We might more rightly expect an increase at the rate of inflation, which unfortunately was not the case, here. (It’s not clear where the buyers found the property or under what conditions the owners decided to sell; were they in a rush? Did they take the first offer that came along? Were they working without representation, which may have lowered the amount they ended up getting for the home but increasing the net proceeds?)

Second, the previous owners paid $615,000 a year ago, but put down $315,000, taking out a mortgage for $300,000.

So, while they lost $55,000, $55,000 of real money, they still have $245,000 to put toward their next home.

(** It appears that the old owners refinanced twice during the 16 months they owned the property (?!), so it’s unclear how much they owed on the property, when they sold.)

Or they can wait and put it down on RED at the Suffolk Downs International Hotel & Casino, sometime next summer.

Source: Arlington: the rules still apply – By Eric Helmuth, Boston.com

Also: Arlington is hottest place in Eastern Mass. – By Sacha Pfeiffer, The Boston Globe

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Updated: 1st Q 2018

Author Profile

John Ford
John Ford
EXPERIENCE

Over the course of 20 years in the Boston downtown real estate market, John represented and sold numerous, condominiums, investment and development properties in Greater Boston and in the surrounding suburbs



In addition to representing Boston condo buyers and sellers, John is currently one of the most recognized Boston condo blog writers regarding Boston condominiums and residential real estate markets. John's insights and observations about the Boston condo market have been seen in a wide variety of the most established local & national media outlets including; Banker and Tradesman, Boston Magazine The Boston Globe, The Boston Herald and NewsWeek and Fortune magazine, among others.



HISTORY

For over 24 years, John Ford, of Ford Realty Inc., has been actively involved in the real estate industry. He started his career in commercial real estate with a national firm Spaulding & Slye and quickly realized that he had a passion for residential properties. In 1999, John entered the residential real estate market, and in 2000 John Started his own firm Ford Realty Inc. As a broker, his clients have come to love his fun, vivacious, and friendly attitude. He prides himself on bringing honesty and integrity to the entire home buying and selling process. In addition to helping buyers and sellers, he also works with rental clients. Whether you’re looking to purchase a new Boston condo or rent an apartment, you’ll quickly learn why John has a 97% closing rate.

AREAS COVERED

Back Bay

Beacon Hill

Charles River Park

Downtown/Midtown

North End

South End

Seaport District

South Boston

Waterfront

Brookline

Surrounding Communities of Boston
Contact
John Ford and his staff can be reached at 617-595-3712 or 617-720-5454. Please feel free to stop by John's Boston Beacon Hill office located at 137 Charles Street.




John Ford
Ford Realty Inc
137 Charles Street
Boston, Ma 02114

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