Mass. Exodus: A generation & housing market in transition

admin November 14, 2005

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MassInc, a public interest research group, released their newest report this morning, "A Generation in Transition: A Survey of Bay State Baby Boomers." The survey asked 1,000 baby boomers in Massachusetts about "their current circumstances and future plans for work, retirement, [and] housing…"

One key finding parallels a phenomena The Real Estate Cafe has witnessed working with home buyers in suburban Boston, where it sometimes appears that neighborhoods are "turning over:"

"The survey also foreshadows a new boomer exodus from Massachusetts – exacerbating the state’s population loss challenge. More than one-third of baby boomers (35 percent), roughly 650,000 people or 10 percent of the state’s population, want to retire outside of Massachusetts."

"There are 1.83 million boomers in Massachusetts, accounting for nearly 30 percent of the state’s population and roughly 45 percent of its workforce. The first baby boomers turn 60 in January 2006."

About a decade ago, 2006 was the date some economists predicted
would be a tipping point in the housing market. More recently
industry observers have said that housing demand from baby boomers is
increasing, and that traditional assumptions about downsizing and
relocating are obsolete. MassInc’s report demands closer reading to
make more sense of those conflicting scenarios.

While I’ve yet to read the full report, my working hypothesis is
that the "Mass. exodus" — pun intended — is bad news for sellers who
are already confronting falling prices, a record number of expired listings, and the first buyers’ market in a decade.
650,000 people represents about ten years worth of housing inventory.
Granted, not all baby boomers live alone, so cut that number by half or
one third. That still leaves five to seven years supply of housing,
presumably single family homes. How fast will they come on to the
market? What impact will those units have on sales prices, especially
if energy prices and interest rates continue to rise?

My guess is that those kind of questions are addressed in the report,
and will be discussed in a roundtable discussion on Friday, December 2,
2005, 8:00 to 10:00am at the Westin
Copley Place Boston. Until then, your comments are welcome here
online, or on The Real Estate Cafe’s readers’ line, 617-876-2117.

Categories: In the News, Market trends, Real Estate Bubble

Boston housing market 2006: “Hard landing” or “return to normalcy”?

Three weeks after economist Nicholas Perna told the Boston Globe that "both early data and the anecdotes — are pointing more toward a hard rather than a soft landing" for the [Massachusetts] housing market, Perna repeated that assessment in the Boston Herald following news that single-family home sales fell 9.2 percent in November. Need to confirm, but isn’t that the four month this year of near double-digit decreases compared to 2004?

"It sounds more and more like the housing adjustment is a harder landing in Massachusetts than elsewhere in the country,’ said economist Nicholas Perna. ‘I don’t think we are seeing anything like that in the country as a whole. My guess is that Massachusetts is among the most seriously affected."

Some real estate professionals dismissed the significance of falling sales, calling them a "return to normalcy." What’s your take? Your comments are welcome below, or on our readers’ "record your own podcast" line: 617-876-2117.

admin December 30, 2005

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Do-it-yourself retirement

Over the course of the past hundred years, the average life expectancy has gone from forty-something to seventy-something. Baby boomers are now envisioning 85 to 100 year life span, and many of us are wondering if we can afford not to work, and whether that would be an interesting lifestyle. The average retiree watches 43 hours of TV per week!

Retirement was started in the ’30’s not to create a leisure class, but because 25% of young people were unemployed. Retirement allowed younger workers to replace older workers, and to begin their economic lives. That condition no longer exists, so the nature of retirement is changing.

Employers will begin to create more flexible forms of retirement so people can continue to work part-time.

50 and 60 year old will begin to retrain themselves and start whole new careers.
Lots of people up and down the ladder to contribute to society.

Comparing the U.S. to other countries, Americans are most likely to be involved in financial considerations, and second least likely to expect their children to care for them in retirement.

Our "do-it-for-yourself" culture is motivating people to provide for themselves.

Ken Duckwell (check spelling), Age Wave

admin June 16, 2005

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Real time “comps”

Link to recent press post Inman re "real time real estate."

Instead of developing a "CMA" type of report that describes sold data, I’ve
been using the "pending date" instead of the sold date.

Reason? The market is changing so much on a daily or monthly basis,
that considering "comps" may not be as accurate if the sold date is used, as
much as using the "pending date." If you develop a list of 6 houses that
sold in August to compare those sales with an offer you’re making today, then
what if the market has been in a decline since March? How much of a value
difference may there be from properties that went pending in the spring,
compared to a property on the market now?

Some, if not all of those 6 "comps" could have sold last spring. As
we know, listing agents and appraisers will often use the "comps" that best fit
the subject being appraised rather than an objective assessment of the sales
data.

So, next time you structure some type of analysis, why not use "pending
dates" instead of "sold dates" to make any comparison to a subject property
you’re trying to negotiate for on behalf of your buyer clients?

I suggested this to one of the "honest" appraises we typically use
here…he said he’s only using month old "comps" because there is an ongoing
decline in values here.

admin September 2, 2007

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US Housing markets entering sustained decline?

Using market trends detailed in an article in the Boston Globe today entitled, US Housing market seen declining in 2006, economist Michael
Bazdarich concluded:

"…we believe housing is due for a sustained decline… The remaining questions are
how hard the fall will be and when it will begin."

Take a look at The Real Estate Cafe’s graph of 32,000 expired listings in Massachusetts below, then let us know if you think the decline has already begun and how far prices will fall. If you are housing hunting now in Greater Boston, what kind of price reductions are you seeing and do you agree that the "holiday season is an ideal time to buy?"

admin December 7, 2005

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Asking prices drop by nearly 15% in 16 suburban Boston towns

Homeowners in Greater Boston and elsewhere continue to expect "big real estate gains" despite a stunning revelation this week: "asking prices in 16 MetroWest towns have dropped by nearly 15 percent" since August, according to MLS statistics. "All good things come to an end," economist and housing guru Karl Case told real estate reporter, Sue Brickman of the Weston Town Crier. Commenting on "a spreading inventory problem" and "a sea change on the demand side which we have been expecting for a long time," Case predicted that "prices are going to fall back to a justifiable level, because people are running out of gas (interest)." Noting that current price reductions will not show up in industry statistics for some time, Case was guarded — but cautious — in his assessment of the market:

"We’ll see some softness for a while, but I don’t see a collapse. But I say that not with a hell of a lot of conviction."

admin October 8, 2005

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