Sunday, June 30, 2013

Sunday Globe Special: House Hunting in Boston

I'm not going to look to long:

"Overseas buyers flood region’s realty market; Wealthy investors, many from China, lift economy but crowd out local bidders" by Jenifer B. McKim |  Globe Staff, June 30, 2013

Foreign investors, especially Chinese and other Asian buyers flush with cash, are purchasing properties in Boston and its high-end suburbs in increasing numbers, adding to the housing market’s revival but also crowding out some local bidders, real estate agents and specialists say....

They are motivated by Massachusetts’ improving economy, the quality of schools, and the region’s clean environment compared with congested urban areas in Asia....

With real estate prices skyrocketing in many Chinese cities, homes in the Boston area are considered a bargain for those with money to spend, said Patty Chen, a Wellesley entrepreneur who runs a company to help Chinese investors find homes here.

“They are very, very happy to buy houses here,’’ mostly for $1 million to $2 million, said Chen, who in 2007 launched her full-service company, America Asia Business Tour Group-Boston, which offers assistance with immigration visas and real estate transactions, as well as consultations on schools and neighborhoods.

“A house in Boston is cheaper than a house in Beijing,” Chen said....

In addition to the Chinese, real estate agents say, wealthy buyers are coming from Canada and other countries in Asia, South America, and Europe.

That is what is making the numbers look good, and explains why Americans are falling further and further behind.

While other parts of the United States — including Florida, California, Texas, and Arizona — have traditionally attracted foreign investors, Boston is also increasingly a magnet, said Jed Smith, managing director of quantitative research at the National Association of Realtors.

“There’s an active market in Boston,” Smith said of foreign home buyers. “They are higher-end customers.”

A big part of the trend is that foreign investors frequently pay cash, which gives them more clout in closing a deal....

The surge in cash sales is bad news for buyers who are dependent on securing a loan....

Like you, Amurkn!

Chinese interest in local real estate has increased as that country’s economy has gone on a stunning growth spurt over the past five years. The number of affluent Chinese — those able to invest at least $1.6 million — grew to about 700,000 by the end of 2012, more than double the number in 2008, according to a report published last month by the Boston consulting firm Bain & Co.

Jack Worthington, managing partner for the New York investment firm Arundel & Co., said recent news about the once-frenetic pace of China’s economic expansion slowing will only push more people to look for other places to invest, he said.

“The Chinese ‘economic miracle’ and private wealth creation are very, very recent phenomena, and the wealthy of China know that,” he said. “We are still a safe haven.”

In addition to seeking profits, rich foreigners are buying homes here to use for vacations and for their children attending schools in the Boston area. According to real estate agents, some are investing in homes years before their offspring are ready to enter college.

Ramez George Sawabini of Bahrain said he has spent about $4.5 million on four condos at the W over the last several years, a pattern that began when his son enrolled at Northeastern University.

Sawabini, who is an investment banker, said he bought the first one-bedroom condo after determining it made more financial sense than renting one for his son. He paid in cash for the first two, and obtained mortgages from a Canadian bank for the others, though he made 50 percent down payments.

“A lot of my friends who have kids in Boston are thinking about doing the same thing,’’ he said.

At 45 Province, where condo prices range from $975,000 to $5 million, foreign investors have purchased about 35 percent of the 109 units, said sales director Wayne Lopez.

“My biggest demographic is the Asian international buyer,” Lopez said. “They see Boston as a great city from an educational and long-term investment standpoint.”

Chen, at America Asia Business Tour Group-Boston, said her clients prefer properties that are newly built and already furnished. In many cases, she said, men buy homes for their children and wives to live in while they travel back and forth from China.

For example, she said, a man from Beijing recently bought a $1.35 million, four-bedroom Colonial in Brookline for his 17-year-old daughter, who is attending a private school in Lawrence.

The buyer — a sales executive who did not want his name published because of privacy concerns — is still not sure how much time he and his wife will be able to spend here, but decided to go ahead with the deal because it’s likely his daughter will go to college in the area and need a place to live. He is already enamored of metropolitan Boston, citing its clean skies and green yards. And his family is happy to help the local economy by investing in property.

“When we live here,” he said, “we spend lots of money.’’


I really don't care who lives next door.

"Are we creating the next housing bubble in Mass.?" by Jay Fitzgerald |  Globe Correspondent, June 30, 2013

The housing recovery is only in its early stages in Massachusetts, but already there’s an eerie sense of déjà vu. The inventory of homes for sale is low. Bidding wars are breaking out. Prices are rising quickly.

It’s a scenario that would be familiar to anyone who lived through the Massachusetts Miracle of the late 1980s and the bull housing market of the last decade, go-go years of soaring home prices and tight supplies that ultimately ended badly. And if policy makers, economists, and industry officials are accurate in their predictions, history is set to repeat itself.

“We’re just going down the same old road we went [down] before,” said Brad Campbell, executive director of the Homebuilders and Remodelers Association of Massachusetts.

The housing market in Massachusetts appears trapped in a boom-bust cycle that only seems likely to accelerate. While any number of variables — interest rates, job growth, consumer confidence — influence home sales and prices, the fundamental problem for the local housing market has remained unchanged for decades....

Banks charging usurious interest.

Median prices for single-family homes, while still below their prerecession levels, are rising quickly....

I think we know why from above.

Rising prices, of course, are good for homeowners and the broader economy, creating wealth that supports consumer spending and a range of economic activities. But if prices rise too fast, it can create the psychology that leads to a bubble, pushing more buyers into the market and driving many to spend and borrow too much with the idea that prices will only go higher.

Eventually, as recent history shows, they don’t go higher, and the bubble bursts.

Some economists attribute recent price spikes to temporary conditions, a combination of pent-up demand from buyers who stayed on the sidelines during the recession and a reluctance by potential sellers to put homes on the market until prices return to prerecession levels.

As the market gets back to normal, inventories will rise and price increases will moderate.

But this short-term adjustment by the market won’t address the long-term issues, other analysts said....


Time to buy a house:

"Local housing market desperately seeking sellers" by Jenifer B. McKim  |  Globe Staff, March 02, 2013

Where are all the home sellers?

The number of homes for sale in Massachusetts is at an eight-year low, despite an increasing number of prospective buyers and a housing market that — overall — is on the mend. Some owners can’t afford to sell because they owe more than their properties are worth, while others aren’t yet convinced it’s the right time. The result is the demand for homes far outstrips the meager supply, an equation that threatens to hold back growth in a business crucial to the state’s economy....

The law of supply and demand works (unlike with gasoline), but what is hidden there is that properties are purposefully being held off the market to keep prices high.

The tight market has prompted robust competition in some of the Boston-area’s more popular neighborhoods, prompting bidding wars and price inflation, real estate agents say....

Also, thousands of homeowners are still plagued by a recession hangover. Despite the recent upturn, Boston-area home values are down nearly 16 percent since their peak in 2005. So many homeowners owe more to lenders than their properties could fetch for sale.


Other potential sellers are simply doing what some do every year — waiting for the snow to clear. “No one likes muddy boots tramping through their houses,’’ said John Ranco, a senior sales associate for Hammond Residential Real Estate in Boston’s South End.... 

Snow? In this age of global warming?


"Boston-area house hunters face bidding battles; Prices rise as many vie for too few available properties" by Jenifer B. McKim |  Globe Staff, March 27, 2013

It’s a common pattern this spring: There are too many potential buyers and too few sellers....

Wasn't even a week into spring yet.

The surge in would-be buyers to historically low mortgage rates and rising consumer confidence as the Massachusetts economy slowly blossoms. The house-hunting frenzy is a good sign, they said, but until more people decide it’s finally time to sell, no one expects the market to really take off.

In the meantime....


Maybe you would be better off renting:

"Tenants, buyers of foreclosed units tangle over rents" by Jenifer B. McKim |  Globe Staff, March 20, 2013

Inocencia Perez and Gerardo Romero thought the arrival of a new landlord meant they could stop worrying about the status of their apartment, on the second floor of a Chelsea building seized by a bank through foreclosure.

But instead of newfound security, Perez and Romero — who have three young children — were unnerved when, not long after taking over, the two-decker’s buyer, City Realty Group LLC, raised their monthly rent by $300, to $1,300. The couple said they were given two options: pay up or move out.

The new owner “wants to raise the rent too much,’’ said Perez, but, “we don’t want to go.”

Through its attorney, Robert Russo, City Realty said the company is simply charging fair market rents to earn reasonable returns. “Why are we greedy if we are in to make a profit? Isn’t that what America is all about?” Russo said.

And that is the problem, scum.

The case is now in Chelsea District Court....

Related(?): Sunday Globe Specials: McLaughlin and the Mob

Such clashes between Boston-area real estate investors and apartment dwellers are becoming more common as the housing market mends and lenders seek to get foreclosed properties off their books.

Previously, tenants in a foreclosed apartment building would have been long gone by the time the take-back process was completed. That changed in 2010, when Governor Deval Patrick signed a law providing new protections to tenants living in foreclosed homes. The intent was to prevent evictions.

City Realty owner Fred Starikov said he and his partner, Steve Whalen, are responsible landlords pumping money into hundreds of housing units in financially troubled neighborhoods that many others avoid. He said Perez and Romero’s unit could rent for up to $1,800 a month on the open market.

“We can’t let everyone stay for the rent they wish to pay. That is not a sustainable model,’’ said Starikov. “They have the right to leave.”

And be homeless. That's one right you still have, Americans.

Housing specialists said the participation of private investors is crucial to turning around low-income neighborhoods hollowed out during the foreclosure crisis — they can often complete deals and get renovation work done faster than nonprofits, which typically have less cash and face more bureaucratic tangles.

I'm so sick of being dependent on the good graces of the f***ing elite!

Chris Herbert, director of research at Harvard University’s Joint Center for Housing Studies, said when investors buy properties, rent increases logically follow.

“If you want these guys to make investments, if they are going to get a decent return, the rents are going to have to go up,’’ he said. The center is currently studying the effects of investors on foreclosed properties in four cities, including Boston.

“You don’t want to gouge. You do have to have enough rental stream,” Herbert said. “It is a hard sweet spot to find.”

But a growing group of tenants and housing advocates say City Realty and other investors are buying bank-owned properties at bargain-basement prices, making few or no repairs, and unjustly raising rents. The result, they said, is that low-income tenants who have long lived in neglected properties are being displaced....

Few would argue that managing rents in formerly foreclosed buildings that are still occupied poses challenges for new landlords. In some cases, former owners walked away from their properties and foreclosing banks didn’t bother to collect rent. That means some residents are being asked to write rent checks for the first time in months, or even years. Collecting the money isn’t always easy.

“Buying properties with tenants in them can be a real horror show,’’ said developer Stephen Chaletzky, owner of Dorchester-based Hearthstone Corp. In one case, he said, it took almost two years to remove tenants who refused to pay rent. As a result, Chaletzky said, he now only considers buying buildings that are vacant.

Sheila Dillon, director of Boston’s Department of Neighborhood Development, said rents in formerly foreclosed homes have risen at a slower rate over the last several years than those in more stable parts of the city. Median rents in Boston’s most desirable sections have reached $2,875 a month, among the highest in the nation, according to the city.

For lower-income tenants, Dillon said, even an incremental rent increase can create hardship. She said the city offers them assistance through legal services and education about housing rights, and — in some cases — by helping them find more affordable places to live....

In an effort to help keep housing costs manageable for tenants living in foreclosed homes, a coalition of public and private groups recently launched a two-year plan to buy 30 foreclosed housing units occupied by renters or former owners in Dorchester’s Four Corners neighborhood.

The group, Coalition for Occupied Homes in Foreclosure, is working with a private developer, Citibank, the City of Boston, and others to purchase such homes and sell them to a nonprofit owner....

That's not the Occupy, is it?


Maybe you ought to just fix the old place up?

"As housing, job markets improve, homeowners spend on remodeling" by Jay Fitzgerald |  Globe Correspondent, March 10, 2013

Area contractors, architects, interior designers, and others tied to the home construction industry are getting a lot of inquiries these days from people like the Feldmans as an improving economy and housing market lift the confidence of homeowners. Just a few years ago, contractors said, the few homeowners undertaking improvements limited work to small, maintenance-oriented projects that couldn’t be put off, such as fixing roofs, replacing drafty windows, or installing new heating systems.

But today, not only are more people fixing up homes, they are launching ambitious projects, tearing down walls, expanding living spaces, and remodeling kitchens and bathrooms....

So sayeth my Globe.

The rebound in remodeling is another indication that confidence is growing and the economic recovery is gaining traction, analysts said.

I'm sick and tired of bulls*** propaganda being passed off as news.

Last week, the Dow Jones industrial average surged to record highs while the Labor Department reported that US employers added 236,000 jobs in February and the unemployment rate declined to its lowest level in more than four years....

Underpinning this rebound are improving job and housing markets. Employers added more than 2 million jobs nationally last year and about 50,000 in Massachusetts, according to the Labor Department. Home sales in Massachusetts last year hit their highest level since 2006, according to Warren Group, a Boston real estate tracking firm.

Those are issues and articles I'm likely to toss and stop covering.

As a result, homeowners are growing more confident about taking on big home-improvement projects. They aren’t investing at the frenzied pace seen during the last housing boom, but they’re more willing to spend money on their homes now that they know values are stabilizing, industry officials said.

Among those feeling more confident is Neil Murphy, a vice president of finance at a local software company....

Mark Zandi, chief economist at Moody’s Analytics, said the increase in remodeling work will help give a much-needed boost to the economy and construction industry, which was the hardest hit sector in the last recession. While remodeling has nowhere near the economic impact as new home construction, Zandi said, there’s “a lot of pent-up demand” by homeowners to undertake renovations beyond fixing roofs and replacing windows.

“There’s still a lot of room to run here,” he said of continued growth within the home improvement sector.

In Massachusetts, remodeling activity could be helping to stabilize construction employment, which has fallen about 30 percent from its prerecession peak, said Alan Clayton-Matthews, an economist at Northeastern University. 

The Globe's chief economic bulls***ter.

The Massachusetts construction industry experienced a small bounce in employment from the federal government’s stimulus spending a few years ago, but those dollars have since dried up. The surge in remodeling may be creating new jobs to offset those lost after the demise of stimulus spending, he said.

Related: Administration Telling the Truth About Stimuloot 

And here you are being lied to.

It’s not just construction firms benefiting from the uptick in the remodeling and renovation business. The world’s largest home improvement company, Home Depot Inc., recently reported that sales at stores open at least a year jumped by about 7 percent in the fourth quarter of 2012.

Its competitor, Lowe’s Cos., reported a 2 percent increase in sales during the same period, and industry officials expect that growth to accelerate as the housing market improves....