Next Moves in Real Estate

This week is a time for subtle reflection on where we've been and where we're heading.

Many of us take this week to write our goals and resolutions for next year.

With market projections not the merriest, it is a time to ponder what moves to make regarding real estate.

If you are thinking of buying, I'll repeat what I've been saying for the past year... it is an incredible time to buy...if you can. Mortgage interest rates and listed prices have never been so simultaneously low.

The media reports doom and gloom but there is opportunity everywhere, especially on the Outer Cape. Will prices come down more? It’s hard to tell, but right now conditions are ripe for a good buy.

Sellers get prepared to list your homes if you must. We've seen interest rates fluctuate between 4.75% to 5.2 % for 30 year fixed products. There is speculation that rates could drop as low as 4.5% this coming year. If you need to sell contact your real estate professional, price it right and use these low rates to get your property sold and get out of it.

One thing is for sure, 2009 will be filled with opportunity for those positioned to take advantage of it both sellers and buyers.

How Long for the Holidays?

Let me start by wishing you a Merry Christmas and Happy Holidays.

This is such a special time of the year, but after friends and family have gone home, carols have been sung and gingerbread devoured. When do you switch off the lights for the last time, remove the candles from the windows and put away those holiday decorations.

Sometimes, in our attempt to keep the holiday spirit alive, homes stay decorated well into January and maybe even early February.

This week on the closing table, we’ll look at what is an acceptable date to remove your Christmas tree and decorations from inside and outside your house.

New Years Day seems to be a popular date to start the year off with a clean slate and put away the holiday bric a brac. This tends to be a day off from work for the majority of holiday revelers and the time can be useful to put the house back to normal after almost two months of living in a decorated wonderland.

But, for those of us who like to hold unto the bright, holiday feeling just a little longer, as we transition into the cold gray winter, Little Christmas is an acceptable date to pack away the wreaths, lights, trees and garland. This date, known as the Epiphany, falls on January 6th and is the official end of the Christmas season. In history, before the integration of the Gregorian calendar, this was the celebrated date of Christmas Day. So, it is completely acceptable, according to tradition, if you leave your decorations up until the 6th of January.

However, being an individual is also important, so if holding unto the holiday spirit means that a string of twinkling lights linger in your décor until Memorial Day, so be it…

As a side note, if you have a loved one serving in a war, it is customary to leave candles in the windows until they return home safely.

Merry Christmas and Happy Holidays.

Interest in Rates

The mortgage industry experienced major adjustments this year. We saw many companies fail or be acquired by large industry giants. Unfortunately, even some of those giants became victim to the mortgage melt down and closed their doors.

Last week we saw some very interesting things happen in the mortgage industry involving interest rates.

Buyers have been hesitant to act on making a purchase due to the speculation that interest rates may come down. US Treasury officials have reported that a 4.5% interest rate may be introduced next year for primary home buyers only and not vacation homes or for refinancing.

Interest rates are already close to this 4.5 % rate. Here’s an example, as of the writing of this, December 12, 2008, a local Cape Cod bank announced a rate of 5% for a 30 year fixed mortgage with no points. This is truly an exceptional mortgage rate… it rivals the interest rates from the peak years of the market. If you’ve been following the mortgage rate activity, you know the significance to this 5% rate.

These low rates are not restricted to primary purchases. They are open to secondary markets, the refinance market and yes, even seasonal condominiums. As a side note, local banks will finance a seasonal condominium.

Low rates and significantly reduced listing prices are creating tremendous opportunity for buyers. Just look at any real estate advertisement and see where the prices are at, it’s incredible.

The snag for any purchase or refinance today, is to get approved for a mortgage. Your home must appraise, you must have low debt to income ratio and near perfect credit.

It will be interesting to see if the US Treasury moves rates next year to help the real estate market. But for now, even Representative Barney Frank stated that new measures most likely won’t happen for awhile.

What an interesting ride this is. The first few weeks of 2009 will be very telltale as to how the year may unfold for real estate.

You Can Do Magic

Double, double toil and trouble,

Abracadabra 

I put a spell on you, now you’re mine.

Are you asking yourself what all these magical lines are doing in a real estate radio segment? Well, this isn’t the only place where a little hocus pocus is turning up in real estate these days.

Sellers are turning to non traditional means to use as tools in selling their homes.

Forget the gimmicks of bonuses, new cars, vacations and more.

The latest is energy cleansers, house blessings and smudging. These unorthodox strategies have increased in popularity over the past few years as sellers eager to move their property will try anything.

Upon hearing this, I thought…wow, it’s come to this. Potions and powders don’t sell property…. a realistic listing price does. 

However, according to a recent report by NBC news…. Homes that are smudged and cleared of negative energy have actually sold.

One real estate agent reported that the condominium of a couple who was divorced and had bitterly argued in the home, was on the market, reasonably priced for over two years. The property was in a good location, clean and priced right. The desperate listing agent could not understand why the property had not sold after numerous showings. Hesitantly, she hired an energy cleanser to smudge the house and release the negative energy. She reported that immediately after the smudging, the next customer who looked at the property made a full price offer. She was stunned.

There is no scientific proof that this works so beware. If you are going down the road of energy cleansing, be careful that your wallet isn’t cleansed. But if it’s cheap enough, do it, it can’t hurt.

Standing on the Sidelines

As numerous and large price reductions continue to correct listing prices, buyers are standing on the sidelines and waiting to see just how low, the sellers will go.

From the buyer’s perspective this strategy can create anxiety. Here’s the risk. If you find a property you like and decide to play the waiting game you could lose out, especially now. Last week, interest rates decreased to the low 5’s for fixed 30 year products. This combined with price reductions are making many properties affordable for more buyers. This past holiday weekend we saw an increase in real estate shopping activity in Provincetown.

Sellers, exhausted form the long stretch of price reductions and time on the market, are renting their homes to year round renters in order to hold their investment until this slow market cycle ends. This may happen to a property you are sitting on the fence over and may lose it if the seller removes it from the market to rent. We’ve seen this lately on the outer cape. A buyer passes on a property in order to play the waiting game. Suddenly, the property is withdrawn from the market due to the seller renting the home. Opportunity is missed by both the buyer and seller in this instance. 

If you are in the market to buy and have identified your dream home on the outer cape, talk to your realtor about making an offer. Realistic offers are still being presented and sellers, eager to close a chapter of their lives, are negotiating. It might surprise you at what sellers are willing to do in this market to move their property.

To Be Thankful For

This year most people I speak with feel there's not much to be thankful for. The performance of the stock market and real estate market do indeed have most of us searching for gratitude in sluggish economic times.

In periods of economic slow down, it is wise to re-assess your situation and make changes that can benefit you, both financially and emotionally. If you are making efforts to save money and spend less, than you are already doing a large part to make it through these challenging times.

We've heard the word recession lately and it appears that is the direction we are not only heading, but are in. This is indeed scary. There are many websites for you to use that can provide direction if needed, just google "surviving the recession." The key is not to panic and seek assistance.

How does this all relate to real estate? Well, many sellers, in an attempt to survive the real estate slow down, are renting their properties in order to prevent foreclosure or help pay the mortgage. This means opportunities for buyers are slowly disappearing as low priced homes and condos are being removed from the market. If this pace continues, combined with the price reductions we're seeing and potential assistance from the government, the real estate market may start a slow turnaround as soon as the third quarter 2009. With less inventory for sale, properties priced correctly and hopefully competitive interest rates, there may be lots to be thankful for next year this week.

Please enjoy the holiday this week and have a happy Thanksgiving.

Preparing Your House for Winter

This week, we'll take a look at preparing your house for the winter.

The first step should always be to give your property one last thorough cleaning. This eliminates potential mold and mildew that may have grown over the summer and fall months with the high humidity. It also gets rid of food particles that rodents and the like can sniff out.

Take crisp white sheets and cover your furniture and electrical components like your tv and stereo. This prevents dust from getting on the upholstery or inside televisions, video players, computers and clocks.

Once you have identified a date that you’ll be leaving, for some it will be right after New Years, you may want to call a plumber and set an appointment to drain your water and shut it off. This will eliminate the threat of frozen pipes and damage. Be sure to leave your taps open both in the kitchen and bathroom. This lets extra water escape. OR if you’ll be coming to your house over the winter, be sure you have your boiler checked. Fill the oil or propane and set the thermostat to 60 degrees. I know that sounds high, but not as high as a bill for the repair of frozen pipes.

If you do leave your interior water on, at least make sure the water source to your exterior spigots is turned off and your spigots left open.

With this quick checklist complete, you can close the door to your vacation home and on what was hopefully a fun filled and relaxing summer and fall here on Cape Cod.

Change, Change, Change

This past Saturday we turned our clocks back an hour. Yes, it’s that time of year already.

Besides the extra hour of sleep that you hopefully were able to take advantage of, this is also a good time to change the batteries in your smoke detectors. Wherever you live, whether you own or rent, inspecting your smoke detectors and changing the batteries twice a year is strongly encouraged.

Even if your smoke detectors are hardwired, which means they are attached to a separate electrical source, you may want to ensure that they are working and that the battery backup has a fresh battery.

Landlords, this is a good time to check smoke detectors in your rental units. Whether you have seasonal, vacation or year round renters, its wise to take the preventive step and make sure the detectors are functioning properly.

Renters, if you rent year round, making sure your detectors work is very important. If you do not have a smoke detector call your landlord immediately. If you do have one, you may want to check it yourself or call your landlord to inspect it.

And finally, it may seem like a hassle to always be changing the batteries, or worse I’ve heard some gripe about the cost of a battery. These are life saving devices. Think about what could happen if a smoke detector has no battery and there is a fire.

Mischief Night

Halloween can leave you with it a variety of tricks that make you cry Boo Hoo.

Mischief night, October 30th, is notorious for the evening that trees get toilet papered, houses get egged and cars get covered with shaving cream.

Although there is no preventing hooligans from targeting your property, and usually it is random and not personal, there are measures to take to lessen the chances your home will get smattered, creamed or papered.

The only real preventive measure you can take is to turn on every exterior light you have and leave them on all night. The bright lights may deter tricksters and have them move on.

You may want to leave some interior lights on in living room as well and bedrooms. This will make it appear as if someone is home and awake.

However, the thrill of getting caught is what really drives these youngsters and having their handy work seen by many is what motivates them to run amuck. The more visible your property is, the stronger the chances you’ll be hit.

If after illuminating your property, the eggs still fly and your home and car is covered, wash the egg off your house as soon as you can. It could stain. Also, remove toilet paper from trees before it rains. That is a mess. And remember, most of the time this isn’t personal as hard as it is to take, its only kids playing pranks. 

Hopefully none of us will be the recipient of such annoyances, but tis the season for candy and fun and tricks galore!

Getting to the Bottom of It

A few weeks back, we speculated about how much farther the real estate market will adjust before hitting bottom. At the time, we felt the market was more or less bouncing along the bottom due to the upheaval in the mortgage industry and numerous price reductions of active listings.

More evidence that we are potentially close to the bottom continues to make itself known. New properties that are listed for sale are in line with what the market is bearing. We are seeing fewer if any, overpriced listings go on the market. Properties priced right, are indeed selling.

Many sellers are now taking their homes off the market and not making further price reductions. Other sellers are putting year round renters in their properties to hold the investment until this cycle ends.

The recently passed rescue package will help homeowners stay out of foreclosure which may impact the real estate market considerably. Now, sellers will not be forced to sell at lower prices. These rescue mortgages do come with baggage of their own though. Homeowners could lose equity in their property by assigning a portion of the profit when they eventually sell. 

It will be interesting to see what will happen in the months ahead. The upcoming election and recent stock market activity will have an impact on all of us in one form or another. We'll have to see how this plays out. The fourth quarter is promising to be an exciting, anxiety filled and revealing time.

Third Quarter Performance

This week, we take a look at 3rd quarter 08 performance of the real estate market and comparison to last year's 3rd quarter sales in Provincetown, Truro, Wellfleet and Eastham.

Here’s what sold:

Provincetown:
8 single family homes, 3 multi family homes, 1 hotel and 29 Condominiums
last year
8 single family homes, 1 multi family home and 27 condominiums

Truro
13 single family homes and 8 condos
last year
11 single family homes and 8 condos

Wellfleet
7 single family homes and 1 condo
last year
21 single family homes and 7 condos

Eastham
30 single family homes
last year
29 single family homes and 6 condos

With Wellfleet being the exception, it appears that Provincetown, Truro and Eastham numbers are the same as 07 quarter 3. It’ll be interesting to see how the 4th quarter compares.

Prepare Your Lawn for Winter

This week we’ll talk about lawn care and preparation for the upcoming winter.

If you have a lawn consisting of grass and not Cape Cod landscaping, now is the time to plan and execute fall fertilization.

Starting early to mid-October mow your lawn one final time. Rake up any clippings and apply a weed killer and grass fertilizer. This will help prepare your lawn for winter while it lay dormant and will assist in spring growth.

Most of our soil on the Outer Cape is sandy, so plan on using a fertilizer that has slow release nitrogen. You may want to ask your garden center professional to help you pick out the proper fertilizer for your area.

It is important to follow instructions when applying fertilizer. Never over do and base your application on your lawn’s square footage. It is best to use a rotary spreader for an even application. Once you finish one direction, repeat in the opposite for thorough coverage.

Make sure your grass is dry when applying the fertilizer, then, water lightly, directly afterwards. This helps the fertilizer stay adhered to the blades of grass and mix into the soil.

When fertilizing your lawn in the fall, make sure you use the proper product for grass and a different fertilizer for shrubs, plants and flowers. Using an incorrect product can impact evergreen growth and decrease fruit and flower count in the spring.

With these helpful tips, your lawn should be preserved through the cold winter months and ready for regular yard maintenance once spring arrives.

Market Update: For Buyers & Sellers

This week, let us take time to discuss the consumers in this crazy real estate market we’re in.

Buyers: The market is riddled with opportunity. Are there some over-priced listings out there? Of course and in this market they are easy to identify. There are more properties priced to sell, however. Don’t let analysis paralysis stop you from moving forward on a property you like. This term describes buyers who are paralyzed in moving forward by using price per square foot, comparable sales and waiting for the next statistic to be added. These tools are ideal and should be used to make an offer on your dream property on the cape not to remain on the sidelines and lose out. The media also adds to this phenomenon. A buyer may be ready to make an educated well thought offer and then the media reports that prices are falling even more. Thus, the buyer suspends the process. This is common place these days. If you find a property you like, have your realtor provide the statistical data for you to make an effective offer. If the seller does not respond in kind, then move on. There are plenty out there.

Sellers: Every offer in this market is a good offer and should be treated as such. If a buyer presents an offer and is pre-qualified, work the transaction until it is abundantly clear, there is no hope. You have nothing to lose. Buyers today are looking at comparable sales, percentage of list to sell price and price per square foot. This is real data they are using to make an offer. Seller responses of “try again” or “a smaller unit may be better for you” or “I’m not bidding against myself” should be left for private closed door conversations. Keep this in mind: buyers in this market are looking for opportunity. If they are taking the time, are pre-approved by a bank, which is no small feat these days, do you really want to send them to another property to see if that seller will engage in negotiations? If so, you may want to remove your unit from the market and lessen the amount of inventory. Tossing an active buyer aside in this market, before negotiating to see where they will go, is akin to draining the bathtub before even taking a bath and in the end, if you employ this strategy, that’s just what you may do. 

Stock Market: The Sky Did Fall

Record losses, depreciation and short sales. Sound like the real estate market? Well, it actually describes last week's activity in the stock market. Chicken Little went running and yes, the sky did fall.

Many of us were impacted last week by the extreme volatility in the stock market. Reported losses didn't have anyone jumping out of windows as they did in 1929, but examining your investment portfolio may be worth your while, if you haven't already. Now money market accounts, traditionally viewed as safe investment tools, are in question. Money managers are mixed in their opinions about where to invest. 

As a realtor, in my opinion, the one sound investment is real estate. Yes, we've seen losses in the current market and no one knows when it will turn around. However, the current conditions present many opportunities for buyers. The fact is that prices are low. Will they adjust any further? Some say yes, some no...the reality is no one knows and no one can claim to.

If you remember the most important aspect to real estate investment...location, location, location, you'll be a winner. If you find a property you deem to be a good investment, buy it and expect to hold it for awhile. That’s just the reality of this market. But having a tangible investment, especially in a resort town like Provincetown, Truro and Wellfleet, you can expect some appreciation in the coming years. Also, there is the potential to generate extra income through rentals, if you choose that route.

If a bank is willing to finance a purchase then you know the property is worth it. Consider how the mortgage industry has completely become stricter in its qualifying. If you are a cash buyer....you are king and queen once again.

De-Lead or Disregard?

This week The Closing Table answers a question from a listener in Somerville who wrote in to the blog.

Mike, We own a two family house and live in one of the apartments. Our tenant is a single woman who has rented for the past three years with no problems. For the past year she has had her boyfriend staying with her and is now pregnant. He plans to move in next month. Our house is old and may contain lead paint. We like her but can’t afford to de-lead. What do you suggest?

Thanks for the question and a good one at that. In Massachusetts, you need to be very careful when it comes to evicting tenants because of potential lead paint issues.

Its hard for me to tell you how to evict her when that may not be in your best interest. 

De-leading apartments do not cost as much as you may think. If you have a tenant who pays rent and keeps the place clean, they are helping to preserve your property value. You may want to explore de-leading. Also, when her boyfriend officially moves in, talk to her about increasing the monthly rent to cover your additional expenses.

There is a chance she may not even stay once the baby is born. If she is a tenant at will which means month to month, talk to her about her plans.

When owning and living in a two family home in Massachusetts, the owner has more liberty when it comes to who can live in the rental unit. She may end up being the life tenant that landlords always look for. There is a way to make this situation a winning one for you whether she stays or not.

In my opinion, explore the potential for her to stay in your house. You may make more money, avoid vacancy loss and have great tenants. 

Fannie, Freddie and Forclosures

It appears the Federal Government will be taking over Fannie Mae and Freddie Mac. What’s happening to these two pillars of the mortgage industry is indicative of the real estate market as a whole. Too many consumers who could not afford homes, bought them in the early 2000’s which created this mess.

Although Fannie and Freddie did not purchase the high risk adjustable rate mortgage products, the overall impact of the sour real estate market is now impacting them.

Foreclosure rates are still on the rise as well, meaning that more loans are going bad.

We’ll keep our eyes on the federal bail out plan, which now, will include running Fannie and Freddie.

The only potential upside to a federally operated Fannie and Freddie, is perhaps the lowering of interest rates.

If interest rates drop below 6%, buying activity could be generated. However, sellers will have to keep their homes priced according to market conditions.

No one has a crystal ball and can predict when we’ll be out of this slow cycle. Some say another year and perhaps all of 2009.

One thing is for sure, the breaking of Freddie Mac and Fannie Mae is not a good thing. We’ll see how this impacts the industry in the coming weeks.

Season's End

It's Labor Day week and with it comes an end to the fast paced energy that our short season brings us here on the outer cape.

The resort town lifestyle resembles the real estate market performance, in a way. Amuse me if you will and let me explain.

The mad rush of buying, selling, refinancing and exponential appreciation from 2001-early 2005 fueled what can only be described as a frenzied real estate market, not unlike our summer from Memorial Day through Labor Day.

With the summer season officially over, we now enter fall, a quieter time, yet still a little busy with tourists. However, after New Years… we all know, its like hitting a brick wall of silence and isolation. Dinner parties and the occasional holiday weekend may pop up… but let’s face it, its pretty dead. That’s where we are right now in the real estate market. It’s the winter. We have seen pockets of activity and some large commercial transactions, but overall, we are not immune to the national trend.

Some experts are saying the market is starting to turn around. Others say it will still be another 9 months to one year.

With prices low, interest rates hovering in the mid 6’s, new federal and state laws created to stimulate the housing market, hopefully, we’ll see a new season begin shortly for real estate.

Even though we are most likely skidding along the bottom, until homebuyers truly believe this is where we are and start buying, activity will remain sluggish.

How far away is Memorial Day for real estate? No one really knows. Stay tuned.

Good Time to Buy?

Clients ask us everyday about how the market is performing and what time of the year would be the best time to buy on the Outer Cape. The best way to answer this is by reviewing market activity and to examine any trends. This way, you can make an informed decision about when to jump into the market. 

It is interesting to note that many buyers who have been in a holding pattern for the past two years have chosen this summer to make their move. Year to date sales volume is up in Provincetown and Truro compared with the same period in 2007. 

(Unlike those two towns, Wellfleet volume is lagging compared to last year’s performance) Even though volume is up, we continue to see multiple price reductions each week, in all markets. Some feel that the increase in the number of buyers will lead to a slowing of price adjustments.

A recent property in Provincetown was introduced to the market at a price that was 5-10% below market value. Four offers were submitted and the property will most likely sell above asking price. What does this tell us? Properties that are priced competitively are selling. It also illustrates that the buyers in today’s market are savvy and are waiting for and recognize a good value when one presents itself.

The best time to buy, is when you want to make that investment. Whether emotional or financial, an opportunity will present itself if you start the search.

Gold Rush or Ghost Town?

Happy Carnival Week for those of us in Provincetown. The theme of Wild, Wild West this year is so fitting as a description of the real estate market.

Are we on the eve of a gold rush for the purchase of foreclosed properties? Will there be a ghost town of empty homes fueled by distraught sellers who lowered their prices to virtual giveaways?

Most likely we won’t see this in Provincetown, Truro and Wellfleet. Here’s what we’ve seen so far this year.

Sellers who have a large equity stake or those who need to sell have priced their properties in line with what the market is doing. This alone presents opportunity for those buyers waiting for the right time. There has been talk of more adjustment over the next year, but even so, the time to buy is now. On the average, Provincetown, Truro and Wellfleet have experienced a 10% adjustment in the market.

Sellers who have been unrealistic took their homes off the market or left their listings active for vanity’s sake, hoping that a magical and perhaps naïve buyer will come along.

Here’s what’s bring buyers this year. Besides the low prices, when mortgage interest rates adjust down, a flurry of buyers rush to town and take advantage of the low priced homes and condos. They buy creating a hiccup of activity.

When rates go up, the activity seems to stop. This time presents cash buyers who use their strong buying power to make a dream of owning on the cape a reality. A cash buyer is now worth his or her weight in gold. 

One thing is for sure. The remainder of 2008 will be an interesting time to see how the market performs.

Happy Carnival. Have fun. Enjoy the festivities.

Making Sense of Refinance

This week we answer the following blogger question:

Q: Interest rates have gone down since I purchased my home in Truro a few years ago. How will I know when it makes sense to refinance?

A: Homeowners refinance for many reasons. Common reasons include: the desire to opt out of an adjustable to a fixed rate loan, the need to use the equity in your house for another expense (like a remodel or a child’s tuition), or simply to save money on your monthly payment. 

The formula to figure out whether a refinance will be favorable for you is quite simple. First, you need to figure out how long you plan to be in the house. Take the amount of your monthly savings with the new loan, and multiply it by the number of months you plan to be in the house. Compare this number to the fees that you will be charged for the refinance. If the fees are higher than the savings, then it may not be worthwhile to refinance at this time. Many people never get past the illusion that a lower monthly payment can create. Remember, you must consider the long-term equation.

It is always a good idea to consult an expert. Speak with your mortgage broker and ask him/her to lay out the comparison for you. If you don’t have a trusted broker, ask a friend or your real estate professional.

Keep in mind that it may be difficult to refinance in today’s market due to the difficulty of obtaining accurate comparable sold properties. Appraisers are hard pressed to provide banks with current sales due to the slow down in the market. This could impede your refinance efforts. 

Stimulating the Market

This week we’ll briefly outline the new federal housing legislation to help stimulate the failed housing market and take a peek at the state’s law to address the foreclosure issue.

The federal program, which became active last Wednesday provides the following: 

Tax relief to first time homebuyers in the amount of a $7,500 tax credit. This will be issued providing it is used by July 1 of next year. The credit must be paid back, interest free, at a rate of $500 per year over 15 years.

Homeowners who claim the standard tax deduction can receive a tax relief of $500 for single and $1,000 if married. 

Bonds will be made more attractive to investors potentially lowering the cost to develop affordable housing.

For some owners here on the cape…the capital gains you claim when selling your second or vacation home may be impacted if you used it as a primary residence for a certain period of time leading up to the sale.

Lendors will need to provide revised disclosure statements early in the process and provide mortgage documents no later than seven days prior to closing.

Freddie Mac and Fannie Mae will increase their lending amounts to markets with higher property values.

Homeowners facing foreclosure will now be able to take advantage of federally backed mortgages to get out of aggressive mortgage products.

Senior Citizens will benefit by an increase in the monthly payouts for reverse mortgages.

Veterans are protected from the foreclosure process until nine months after they return from active service

Communities hit by the demise of foreclosed properties will share a redevelopment fund to restore vacant homes.

We’ll see how the federal program works out. It is a massive step in the right direction to help correct the soft real estate market and rescue suffering homeowners trying to save their properties.

The state law which delays property foreclosures seems to be working. The law which became active May 1st, is designed to give homeowners a 90 day grace period before being foreclosed upon.

There were 2308 new foreclosures in June of 2007. This June there were only 350 according to The Warren Group, a Boston based real estate data publishing company. The law may be working. However, the overall number of foreclosures are due to double this year compared to 2007.

Completed foreclosures have dropped 19.5% from May to June. More time is needed in order to determine the results of this law.

Eye on the Housing Crisis

This past weekend the Senate met for an emergency session regarding the housing crisis.

A bill sponsored by Democratic Senator Chris Dodd passed 72 to 13 in a rare Saturday session and will most likely be signed into law by George Bush this week. This bill is designed to help homeowners who are committed to risky adjustable rate mortgages that are due to increase to an un-affordable amount. Some 400,000 struggling homeowners could be positively impacted by this measure. It authorizes government backed mortgages for homeowners at risk for foreclosure, provides tax credits to first time home buyers, new property deductions and new standards for brokers and mortgage contracts. This will hopefully slow the foreclosure epidemic down.

The foreclosure rate is now close to 8500 families per day and a projected 1 in every 8 homes will be foreclosed upon within 5 years. The law has also dedicates $4 billion to help communities maintain and redevelop homes that have been foreclosed upon, an affordable housing trust fund and tax exempt bonds to refinance bad mortgages. Also, part of the law will allow for the creation of an agency with a president appointed director. The agency will dedicate unlimited federal funds to help insure the mortgage giants Freddie Mac and Fannie Mae.

As we skid along the bottom of the real estate market, we'll keep our eye on how things play out. 2008 is turning out to be a very interesting year in the real estate market.

Seasonal Price Shift?

Buyers and sellers alike often ask if prices decrease during the winter on the Outer Cape. It’s a good question, but the answer is contrary to what you might expect. Even though our local population diminishes during the cooler months, the real estate market on the Outer Cape is active year round. We never see a seasonal shift in pricing deflating some buyers hopes that if they wait for the winter, they will get a better deal. In fact, one of our busiest periods traditionally falls in January, right after New Year’s. Determined buyers often begin their search during the winter months so that they can be assured of summer occupancy in their new properties. Also, many buyers receive sizable year end bonuses that can provide the down payment needed to make the dream of owning on the cape a reality.

We tend to see a slight increase in market inventory immediately following the summer season. Another ‘trend’ that we have seen is increased activity in the Commercial market during the winter months. Future business owners shop for and purchase property during our quiet months in order to allow themselves enough lead-time to prepare for the summer crowds.

The best time for you to buy is when you find the perfect property and your gut tells you so! Remember, that in addition to being the ideal summer destination, the Outer Cape is a beautiful and restful place to visit in the off-season.

Trouble for Goliath?

In the wake of the failure of such giants as Countrywide and Washington Mutual, no one expected this past week to see Indymac Bank join the ranks of failed mortgage institutions. Federal regulators shut down IndyMac last Friday. The bank’s assets as of the end of the first quarter 08 were over $32.01 billion, making it one of the largest Lendors in the nation.

The Federal deposit insurance corporation has taken over the bank which it described as the "fifth FDIC-insured failure of the year." Indymac reopened Monday under management of the FDIC.

But more startling and perhaps disturbing is the potential failure of Fannie Mae and Freddie Mac. Fannie Mae was created during the Depression as a way to revive a collapsed housing market by providing mortgage guarantees to low- and middle-income Americans.

Today they own or guarantee a mind-boggling $5 trillion in loans, which is why the fear that they could go under is so important. Fannie Mae or Freddie Mac usually purchases home loans as packages from banks. Your home loan could be one. If Fannie Mae and Freddie Mac were to fail, analysts say mortgage rates would soar, mortgage lending would grind to a halt and borrowers of all kinds would pay higher rates, negatively impacting the already sluggish economy and real estate market. 4
The Bush Administration met over the past weekend to explore options to prevent any failure of the mortgage giants.

Senator Chris Dodd, trying to calm fears, says there is no crisis and no bailout is necessary. Quote "The economics are fine in these institutions, and people need to know that." End quote

It is truly an interesting time for the real estate industry.

2008: A Look Back ... So Far

This week, we take a look back with a year to date recap through July 6, 2008 and comparison of year to date 2007 of the real estate activity in Provincetown, Truro, Wellfleet and Eastham.

This includes all categories of real estate, Single family homes, multi family homes, condominiums, lots of land, hotels and commercial.

In Provincetown, 93 properties sold in 2008 year to date. In 2007 77 properties sold during this time. Provincetown activity is up 16 sales compared to last year.

In Truro, 33 properties sold in 2008 year to date. In 2007 30 properties sold during this time. Truro is up 3 sales compared to last year.

In Wellfleet 26 properties sold in 2008 year to date. In 2007 48 properties sold during this time. Wellfleet saw a decrease in activity by 22 sales.

In Eastham 62 properties sold year to date 2008. In 2007 65 properties sold during this period. Eastham saw a decrease in activity by 3 sales.

In 2008 the majority of sales in Provincetown have been condominiums, 68 in total, in Truro 20 single family homes, In Wellfleet 17 single family homes and Eastham 48 single family homes. 

Provincetown appears to be performing slightly better than the past few years. This could be due to the low interest rates in the first two quarters of 2008 combined with low prices. Buyers are taking advantage of this opportunity.

Truro has seen a slight increase in sales. This could be due to price adjustments and buyers seeking opportunity.

Wellfleet has seen a dramatic decrease in sales this year compared to the same period last year. This could be due to pricing and buyer demographics for Wellfleet.

Eastham has seen a negligible decrease in sales.

We’ll keep monitoring the activity and bring it to you weekly.

Second Mortgage

This week we answer a listener email.

Q: I received a decent offer on my property but the buyer asked me to hold a second mortgage. What should I do?"

A: Seller Financing is becoming more common in today’s market. Traditional qualifying criteria for mortgages have tightened significantly and in general, our ailing economy has made it more difficult for potential buyers to save money.

You may stand to benefit from ‘holding paper’ on the sale of your property. Firstly, you may negotiate the interest rate and terms, and in most cases the rate is higher than traditional financing. You will be earning interest on your equity in the property, and in the end, you will make more money in the transaction. Also, you may qualify for the tax benefits of an installment sale where you can defer a portion of your gain until the loan is satisfied. But of course, check with your accountant.

There are risks to providing seller financing. Most often, your loan is subordinate to the primary financing, and in the case of default or foreclosure, your equity may be surrendered.

There are steps you can take to protect yourself, however, and you should seek the assistance of your attorney and/or accountant. Make sure you verify the credit worthiness of the buyer. Require the buyer to carry hazard insurance on the property and include a due-on-sale clause. Also, in some instances, you can require the buyer to carry PMI to insure your loan against default.

In summary, you should not be scared off by an offer that asks you to hold financing. With professional advice and the proper protections in place, agreeing to participate in the financing can result in a win-win situation.

Online Accuracy: Property Values

This week we answer a listener question.

Q: "I am addicted to looking at property values on Zillow.com. I watch my home’s value fluctuate. Exactly, how accurate are the estimates from these sites?"

A: There are many websites that estimate property value and each one needs to be taken with a grain of salt. Zestimates from Zillow.com appear to be random and are not consistent. These online estimates range from 5% of the sales price to over 20%. 

Websites that assess the value of your home, rely upon data from your town’s tax assessor’s database and also upon recent sales data. There are a few problems with this means of evaluating a property’s worth. 

First, it is not possible for an entity located off the Cape to accurately assess the condition of a property. A physical inspection is valuable.

Second, location attributes are crucial line items in any physical appraisal. An external obsolescence may not be noted that can significantly impact value. 
Third, when you look up a property, the list of comparable recent sales that are used to determine value, almost always includes homes or condominiums that have nothing in common with the subject. 

A perfect example of this flaw is when you research a waterfront property in Provincetown, Truro, Wellfleet or Eastham. You will see comparable sales listed that may only be a half mile from the subject but are not on the water. The value is tremendously different, however, this is not figured into the equation.
The best way to determine the value of your property is to hire a Certified Appraiser. An appraisal will provide the definitive value of your home. Or, ask your Real Estate Broker to prepare an opinion of value backed up by a Comparative Market Analysis. 

Take those online websites and do yourself a favor…hit escape.

Happy Birthday!

This week The Closing Table turns 2 years old. In those two years, we covered topics that addressed the real estate market on the outer cape and answered questions from you.

You’ve emailed, stopped me on the street and approached me at social functions in order to ask about your home, condominium and market conditions. Most importantly, you provided feedback regarding this program. Weekly shows have moved many of you to send in a response. I strongly encourage you to do this. No question is silly, no concern unwarranted.

It seems that The Closing Table has established a solid listener base, who tunes in to pick up a tip and check out the real estate activity in Provincetown, Truro, Wellfleet and Eastham. At the end of each calendar quarter, I recap the activity in these four towns, a particular listener favorite. 

Every weekday at 1PM, whether at work, in a car or at home you listen. It is to you that I extend a grateful thanks. It makes this seem worth while, knowing that the information broadcast, helps you, whether a homeowner, renter, buyer or seller with your real estate needs in some way.

I ask that you keep listening, keep emailing and feel free to stop me wherever you see me to ask a question or provide feedback. Thanks. 

A special thank you is extended to the underwriters who have continued supporting The Closing Table on WOMR for two years. The law office of David Hallet, Pride Mortgage and The Home Inspector. 

So in closing, Happy Birthday to The Closing Table… I’ll be back next week.

A Rise in the Cost of Living ... Home

The cost of home insurance has been on the rise. In some cases premiums increased close to 10% in 2007.

Looking at ways to save money on home insurance can be tricky, especially when your property is on Cape Cod.

One way to save is by combining your home and auto insurance policies together. Using the same company for both may save you up to 20% on the home insurance policy. Be a diligent consumer and as with any other service, get three estimates from three different companies. Use a different agency to get the quotes. 

Also, Home insurance policies are tiered as needed. There are minimal coverage policies that only cover certain items if damaged, mid level packages that most homeowners have and extensive packages to include possessions, finishes and replacement. Living in a coastal area, you may want to have a policy that sits between the mid level and extensive.

Check with your insurance agent in regards to what is actually covered. In some policies, high end finishes are not covered and if a home needs rebuilding, the insurance company will pay for basic finishes only.

Review your deductible as well. In most case there is no need for a low deductible and most of us are paying for one. Paying a higher deductible can save you hundreds per year.

These are some basic measures to take when looking to save money on your homeowners insurance. There could be more. Call your insurance agent and you may be surprised at where you are overpaying and could save money.

A Reliable Realtor

When choosing a realtor in this market to list your home for sale, you may want to be careful with whom you sign.

The Boston Globe reported the following interesting account of a buyer’s agent recent woes. The agent was hired to help an aging couple downsize to condo living.

The couple had identified a particular large association that housed multiple units for sale. They decided to look at three. The properties were listed with different agencies and the buyer agent called each and left messages to set up showings. Only one called back the same day to confirm an appointment and added that there has been a lot of activity in the 26 days the condo has been for sale.

The two other agents never called back. The buyer agent called both again. One of the listing agents, in an irate tone, yelled at the buyer agent an accused the agent of not being an MLS registered realtor. The listing agent then said the property was dark and needed work. The condo has been for sale for over one year. 

The other listing agent, who called back a few days later, told the buyer agent that he worked a half hour from the listing and showing it is difficult. There is no lockbox, so any appointment will have to meet his schedule requirements, not the buyers’. This condo has been for sale for almost 2 years.

Needless to say, the couple moved forward with the one they could see.

Seller beware, do your homework before listing your home. In this market the last thing you want to do is hire a listing agent who alienates the buyer agent and makes it a challenge to show your property.

Unless you want to own that listing that never sells, seek out an agent that is creative, aggressive and does not have attitude. The buyer agent is an important piece of the equation in today’s delicate market and scaring them away is not a wise strategy for selling your home. 

Summer, Start Your Engines

Happy Memorial Day week and thus another tourist season is kicked off here on Cape Cod. Since the summer has unofficially started, lets kick it off with a repeat favorite silly closing table from last year.

The real estate market has continued its correction since last Memorial Day when we explored the value of the Pilgrim Monument. I still wonder, how a potential listing price has been impacted in the past year. 

With the market showing a 28% increase in sales in Provincetown for the first quarter 2008, this excitement could be used to market the monument and get it sold. Use the wow factor of the view and privacy. What an opportunity. However, not to be a gloomy gus, with projections of a flat real estate market through the presidential election, how will this impact the value?

Who knows, perhaps some eager real estate developer will see fit to convert it to condos. That could drive a nice price….Can you imagine Monument Heights Condo Asssociation. Hmm. Weirder things have happened.

What about its marketing qualities...well lets see...it does have an incredible view from its yard, of which green grass of any size is a rarity here. There are also stellar views from the top floor, However, the walk up is a killer, deduct for no elevator. It is made of stone, so the structure is solid. However, it can't be demised into condominiums so deduct more from its value. There is ample parking, however you need to climb more stairs to the door. Imagine carrying groceries and perhaps a baby. And lets not even mention the title V. But, owning Provincetown’s own skyscraper? Priceless. 

Of course I jest, and on this Memorial Day week, lets take time to think about those who have passed on before us, both family and friends, soldiers and civilians in wars past and present and the unknown especially those for whom the Pilgrim monument is dedicated.

To all of us who live here year round...have a great season on Cape Cod.... and I’d like to extend a special closing table welcome to tourists and seasonal residents. Have a good summer and remember to be patient and smile.

Meaning Behind 'Floaters' Rises to the Top

This week’s Closing Table is provided by Emily Flax of Provincetown.

Have you ever wondered about the meaning of the blue plaque that is found on many Provincetown homes? Throughout Provincetown, but mostly in the West End, you will find antique homes with a blue and white ceramic tile affixed that depicts a house on a boat.

These homes are known as Floaters. They were built beginning in 1818 on the peninsula that we know as Long Point. Many of today’s visitors are not aware that at one time, a settlement existed on Long Point. There was a thriving community, with a Salt Works being the primary industry. The Light House was built in 1826 and there were windmills, a store, a school, boat landings, and a total of 200 people that lived in 38 houses.

When a large salt deposit was found in Syracuse NY, it essentially put the Long Point Salt Works out of business and eventually in the 1850’s, the settlement was abandoned and the families moved to the mainland. Wood was a precious resource at the time, and rather than just leave their homes, the settlers floated them over the bay on rafts. They were placed on foundations, and many still stand today.

That’s a little Provincetown history for you on the Closing Table.

The 'Skinny' on the Short Sale

This week, the Boston Globe printed an article about the pitfalls of the short sale.

We’ve discussed short sales quite a bit recently and how they can be used to aggressively liquidate real estate in a declining in market.

A short sale, if you don’t remember, is when a bank approves the sale of a property for less than the mortgage principal in order to avoid a foreclosure.

What isn’t known is that short sales are unpredictable, difficult to manage and downright tedious. The short sale process is frustrating to say the least. Bank employees are shuffled around and in most cases, do not really know the process. In some cases, within the final hours, the bank will rescind its approval having put everyone’s hard work to waste.

This happened in the short sale I was recently involved in as an agent. Getting a bank employee on the phone was impossible. Despite efforts of the seller, listing agent, buyer’s mortgage company and buyer’s attorney, the sale took over four months to process. Once all the t’s were crossed and I’s dotted, days before the closing, the bank informed all parties that the short sale was not approved.

If not for the diligence of both realtors, mortgage broker and both attorneys, who all kept a paper trail via email of the bank’s approval months earlier, the sale would not have happened.

This particular transaction closed shortly after. The benefits of the short sale were clear… the seller got out of the mortgage, the buyer stuck it out and now owns property that has already appreciated in a down market. And the bank...they don’t have to spend money to foreclose. 

The short sale is a good tool to use. Just remember that all parties involved need to have patience and keep a record of all communication with the bank.

Shying Away from the Shiny Metal Box?

Last week we answered a letter from a listener in Provincetown who needed some advice on whether or not an air conditioner would attract weekly renters to her condo in the west end. My response prompted the following email from Heather in Provincetown. 

This is an abbreviated version for the limited time we have.

Hi Mike,
As a WOMR listener, I enjoy your show, but don't agree with your recommendation of window unit air conditioning for summer rentals. Many Condo Associations prohibit the installation of these noisy and unsightly appliances.

The constant hum of neighbors' aging air conditioners is something urbanites who frequent our shores like to leave behind. We have the luxury of being able to have open windows allowing fresh air to circulate. Perhaps listeners who are keen on the idea of air conditioning should consider portable models to keep the peace with their neighbors...just my two cents...thank you…Heather

Thanks for your email. You do indeed bring up a legitimate point. One that I fear may not be as important to homeowners attempting to grab rental income. Just this week while I was showing property, the prospects and their agents expressed the need for air conditioning to attract weekly renters. I told them that sea breezes and fans usually suffice, but if this was important, they purchase a new air conditioner that is quiet and to keep it locked up unless needed in extreme heat. They seemed receptive to the idea but what happens after the closing is anyone’s guess. 

I agree that seeing a shiny metal box sticking out of a window is pretty unsightly. New low profile ac’s are smaller and don’t protrude as far out. Most new construction in Provincetown has central air which eliminates the noisy rattle and grinding noise that older ac’s make, annoying neighbors who keep their windows open wanting to fall asleep to the sound of the town.

If the association you live in or next to does not prohibit the use of the air conditioners, and this is important for you. Address your concerns with the association’s trustees.

'Air-ing' Concerns on Summer Rentals

This week, we answer a listener email:

Mike, I enjoy listening to The Closing Table as we have WOMR on the radio at work all day. I was asking co-workers a question about my summer rental and they suggested I email you. So here it is: I rent out my small west end studio to weekly renters to help with the mortgage. Should I provide an air conditioner? Signed, West End Studio Gal. 

Thanks for listening and for your question. This is a common dilemma that many landlords ask themselves when renting their property out on a weekly basis. When offering your condominium or home for rent, especially to a vacationer, keep in mind that you should have most of the amenities a hotel, guesthouse or rental property has.

On Cape Cod, it is rare that we need air conditioning, however it can get pretty stuffy in late July and August. Air conditioning can make the difference if a renter comes back. 

You may want to provide a small window air conditioning unit that can be installed if the heat and humidity get unbearable. Your strategy may be to keep your air conditioner locked in a closet. In the event of a heat wave, have a cleaner or manager install it for you if you are not in town. A renter will appreciate the effort and could potentially re-book for next year. Retention and repeat business after all, should be your goal. 

Keeping the air conditioner in the closet also protects you. Renters are prone to running air conditioners when the weather is cool, when they are out or with the windows and doors open. This of course will leave you feeling chilled with a high electric bill.

Sight-seekers Extend Their Stays

In conversations I’ve had throughout the years with various individuals who decide to move here, the natural beauty of Cape Cod always comes up as one of the reasons.

This past week, we’ve been treated to a spectacular show of Right Whales feeding off Race Point and at times Herring Cove Beach. If you live here or hear this broadcast and have not witnessed this magical happening, try and see this before it ends. A whale watch from the beach is rare.

With that being said, the wonders experienced on the outer cape are breathtaking. From our sunsets and world’s most beautiful beaches to the manic culture of summer and isolation of winter, there is nowhere like the outer cape.

Why do I bring this up? Well, it seems that folks are buying on the outer cape now for the absolute love of the area, not for a quick buck to be made on a flip. This is good news for us year round residents as it means more concern and care from homeowners who vacation here.

Since 2005 the median real estate price for a single family home in Provincetown dropped 12.6% to $594,500. In Truro, a drop of 8.7% to $582,500 and Wellfleet a 10.7% drop to $500,000.

This means that a second homebuyer who missed out on opportunities before the radical appreciation of the early 2000’s can come back and make that dream of owning a vacation home on Cape Cod come true.

To List, or Not to List ... Your Property

This week we start a three part series pertaining to listing your home, buying property and open houses.

Today we’ll discuss the reasons to list your property and whether or not you may want to wait.

Most consumers by now are aware that selling your home in today’s market is taking longer and you will not yield the strong profit you desire. If you purchased your property within the last few years and you don’t have to sell, then you shouldn’t. If you have a strong equity base but no reason to sell, then don’t. You can maximize the profit on your house when the real estate market comes back.

Here’s why you should sell. If you are in financial distress and need to liquidate a real estate asset, banks are working with consumers to sell property through short sales. This allows you to market your property in line with today’s prices in order to stay competitive.

Another reason to sell is if you want to buy a larger property. Now is the time. Selling your existing home at a slight loss or for a lower yield is worth the gain you’ll receive on the new property when the market rebounds. The potential loss that you incur due to selling at a lower price will all be forgotten when you are in a new home and the appreciation starts.

If the property is an investment home, the loss could be a potential tax benefit. Check with your accountant.

Check back next week when we explore what is motivating buyers to act in this market.

First Quarter Recap

Here's a recap of the real estate activity for the first calendar quarter 2008.

Let’s start in Eastham
33 properties sold between January and March
24 single family homes, 1 lot of land and 8 condominiums
The average sales price in Eastham right now is $521,000 and property is on the market for an average 149 days.

Moving up to Wellfleet
13 properties sold between January and March
8 single family homes, 1 lot of land, 2 businesses and 2 condominiums
The average sales price in Wellfleet right now is $519,000 and property is on the market for an average of 321 days.

In Truro
8 properties sold this past quarter
4 single family homes, 1 lot of land and 3 condominiums
The average sales price in Truro right now is $527,000 and property is on the market for an average of 232 days.

And finally in Provincetown,
37 properties sold between January and March 2008.
4 single family homes, 1 multi family home, 31 condominiums and 1 hotel (The Brass Key)
The average sales price in Provincetown right now is $577,000 and property is on the market for an average of 190 days.

For more information and additional statistics on this wrap up of real estate activity in the first quarter 2008, please email me at mike.dubour@verizon.net.

Almost Prime Time

The stars are aligned and conditions are prime to buy real estate. It is beyond textbook perfect...almost. 

Here's what I mean. Listed prices for condominiums and single family homes are the lowest they have been in years. This is based on most sellers now pricing their homes realistically per the market performance. Low listed prices combined with the fact that interest rates for 30 year fixed mortgages may decrease to 5.5% this week, makes it very clear that something magical is occurring for those who want to buy real estate.

Rarely, have both the listing prices and mortgage rates been simultaneously low.
Historically, even in the early nineties this phenomenon did not occur. The market was only sluggish for two years before the extreme escalation in values started.

If the market starts to rebound one year from now, it will most likely take another three years to see the same levels of appreciation as we did before the recent correction.
Consumers would serve themselves well to pay attention to the signs. Low mortgage rates, low listing prices, multiple foreclosures and short sales. This is indeed the time to make that leap.

But here's the double edged sword. Keep in mind that obtaining a mortgage in today's market is not as easy as it once was and can be downright impossible. The recent mortgage meltdown has put stricter qualifications on potential homebuyers. Although there is tremendous opportunity out there reflected in low listing prices and foreclosures, not everyone can take advantage. Lenders are no longer giving away money. And if you plan on buying a foreclosed property keep in mind that you have to be pre qualified and bring a deposit of up to $5,000 the day of the auction.

So although it is a good time to buy, you have to have clean credit, strong income and a good eye for opportunity. 

Buying a B&B

This week a listener emailed the following question:

Q: My partner and I have had a long time dream of owning a Bed and Breakfast, and we are thinking more seriously about starting to look in Provincetown. Can you tell me about the process and how much we will have to put down as a deposit?

A: There are over 85 Guest Houses in Provincetown. There are 12 on the market offered for sale, priced from $699K to $3,000,000. Most often, Guest House properties are sold completely furnished and equipped.

It is important to speak with a commercial lender at the beginning of your search so that you can determine the price range in which you should be looking. Here are some questions to ask yourselves: Will one of you continue to work at your present job while the other runs the inn? Do you own other properties? Do you have an outside source of income? The lender will ask these types of questions and use all of your income to pre-qualify you for a loan. Generally speaking, you will be expected to put down at least 20-30% of the purchase price. This number will vary, depending upon your personal financial strength and credit history while also taking into account the income of the property you are considering.

Once you have identified a property and a lender, you will work with your real estate agent and your attorney to negotiate all of the details of the sale. The lender will order a commercial appraisal of the property and in some instances, an environmental inspection. The appraisal is a critical part of the process, as the appraiser will use the income to value the property. The lender may also ask you for a business plan.

The present climate is very favorable for commercial loans – interest rates are low and there are some great loan products for you. In addition, there is money available through the Small Business Association (SBA). 

Once you own your inn, the fun part starts! You will meet people from all over the world and become a part of their special memories of Provincetown. 

The Market is Active!

Market Snapshot
Activity since January 1, 2008

For those of you who are wondering how the market is doing this year, here is a year-to-date account of what’s happening in the three towns on the Outer Cape!

Provincetown:
There are currently 317 properties for sale, including Single Family, Multi Family, Land, Commercial, Condominiums and Hotel/Motels.
33 properties are under agreement, and there have been 29 sales ( 24 condos, 3 single families, 1 hotel, and 1 Multi)

Truro:
There are currently 196 properties for sale, including Single Family, Multi Family, Land, Commercial, Condominiums and Hotel/Motels.
19 properties are under agreement, and there have been 7 sales (3 condos, 3 single families, 1 Piece of Land)

Wellfleet:
There are currently 131 properties for sale, including Single Family, Multi Family, Land, Commercial, and Condominiums.
12 properties are under agreement, and there have been 8 sales (6 single families, 2 Commercial Sales

The Grass is Always Greener

It's mid-March and soon the sun will shine brighter, days will get longer and spring will arrive.

If you have a lawn, here are some quick tips you may want to follow in order to make sure you have green and lush grass.

1. Rake the lawn to remove all dead leaves that the blustery winds of winter blew onto your lawn. If there are no leaves, rake the lawn thoroughly to remove dead grass. Raking removes thatch, a build up of dead leaves and grass which prevents the proper growth of individual blades of grass.
   
2. If you have mossy type plants growing in your lawn, you may want to apply lime to ensure the soil acidity is proper for grass. Not every lawn needs lime so exercise caution and read instructions.
   
3. Seed the lawn. If you have bare spots that need to be seeded or a part of the lawn is worn after being used as a walkway during the winter, get out the rake again. Pay special attention to these areas with the rake to make sure all thatch is removed. Then, use a garden rake to create grooves for the seed. Spread the grass seed. Ask your garden center expert about which seed is best for your location.
   
4. Once the lawn is raked and seed planted, buy a multi step fertilizer and weed killer. Spread this over the entire lawn. Follow the instructions and make sure you don’t over apply. If you use too much fertilizer, it will burn the grass causing more harm than good. Make sure your fertilizer is a cool season fertilizer depending on where you live.

A typical time to start spring lawn care is now if you have warm weather. You can wait as long as mid April providing the weather is cool. Temperature for sprig lawn care should be at least consistently in the 50’s.

Once you follow these simple steps, you too, can enjoy tall glasses of cool lemonade while standing barefoot in cool green grass.

Put it in Reverse

Reverse mortgages are becoming increasingly common as baby boomers reach retirement age and are seeking ways to supplement their income.

These mortgages can be a welcome gift for those homeowners who have a sizeable chunk of equity they can draw from. The interest rates on reverse mortgages can be quite competitive and can be the answer many retirees need for that extra cash.

However, using a skilled and reputable mortgage company or bank is strongly encouraged. There are sinister organizations popping up that are promising low closing costs and cheap financing. These mortgage vampires are preying on retirees and feeding off their equity.

On Sunday, The Boston Globe reported that a certain company has been providing reverse mortgages with an agenda to unsuspecting consumers. When the reverse mortgage closes, homeowners are finding that they unwillingly commit most of the proceeds of their mortgage to investment schemes created by this particular mortgage company.

We must always act with diligence and use trusted real estate professionals when refinancing, especially with reverse mortgages.

Keeping your home in which you live until the very end, is part of the American dream. The reverse mortgage, when calculated properly and used for its intended purpose can make this a reality.

Treat Before the Heat

The winter winds are blowing and the air is freezing that’s for sure. It’s nice to stay warm indoors this time of year. However, while you are sipping your tea and cozying up to a book, termites, ants and bees may be laying dormant within your walls, just waiting until the warm weather to make their presence known. 

If you own you may want to make it a point to have your home treated prior to springtime in order to stop insect infestation. 

Telltale signs of termites are visible conduits of saw dust that they construct as roads, one might say, on the surface of interior walls. Bees or wasps like to hide behind the wooden shingles that many of our homes have as siding. Be on the lookout for sawdust drippings caught in cobwebs. And ants…well they are a more clever where they reside in the winter, they can’t help but be seen once spring arrives. You’ve seen these guys or should I say gals…they are those big black, black ants.

If you rent, pay attention to any noises you hear within the walls. It may sound crazy but you can actually hear termites chewing wood if you listen carefully. Don’t be afraid to burden your landlord with a call. I’m sure they’d love to know.

In our older homes here on the cape, the seasoned wood is like a bottle of aged wine to any bug. It is mind boggling how quickly a support beam can be consumed.

Although its not a pleasant thought and could cause the creepy crawlies, insect infestation is not uncommon on Cape Cod. Property owners pay thousands of dollars yearly in repairs and treatment related to insects. These are definitely those house guests that will eat you out of house and home. Awareness is key to prevention and in the end will saving you money.

A Mind for Selling

Lately we’ve been discussing methods of selling property in the soft real estate market. We’ve shared advice on topics such as staging your home, lowering your price, gimmicks and interest rates. One area that hasn’t been covered is the Seller’s mental health when it comes to living in a home that won’t sell.

If you live in your listed house and are feeling the anguish of not selling, you may want to make some changes to help you stay sane. Keep in mind that it can take up to one year to sell a house so you should be comfortable and like where you live.

Lets start in the living room: Buy a slip cover for your couch and chairs. Make sure they are matching. Add new cushions. Change out old magazines on your coffee table and buy fresh flowers every week. 

In your kitchen, start by clearing canisters and unnecessary items from your counter top. If you don’t have a backsplash, add either a faux tile or put in a tiled backsplash. It won’t cost too much and will make your kitchen feel drastically different. 

In your dining room or eating area change the light fixture that hangs over your table. A new light will give it a new feel.

In your bedroom, think about adding a slipcover to your headboard to make it feel new. There are quilted covers that make it appear your headboard is padded. If you have a chair in your bedroom or exercise machine, remove them. These only make good clothes catchers and are rarely used for their purpose.

In your bathroom try changing the vanity. Home Depot and Lowes offer low cost vanities and medicine cabinets that can totally change the feel of your bathroom.

These inexpensive and small changes in each room can make a big difference for your mental health. Who knows maybe you’ll get a buyer once you make the changes. However, the main point is to feel better about living in your home until it sells.

Setting the Stage

Can you please tell me if staging my condo will help it sell quicker?

Thanks for your question and it is one that has Sellers on the fence as to whether or not to go through the hassle. There is actually some factual data that we can draw on in order to try and answer this inquiry.

In 2003 when the market was strong, an organization called HomeGain researched the results of staging a home and found that a properly staged home or condominium sold for close to $3,000 more than an un-staged or vacant property. 

In 2005, the online training company Stagedhomes.com discovered that staged properties did indeed sell for 6.9 percent higher than other homes. 

These stats did lead many entrepreneurs to start home staging companies for both resort markets such as Cape Cod and primary markets. Staging fees range from $500-$1000 for consultations and actual staging.

Our buyers on Cape Cod seem to go off instinct and know immediately if they like a property based on a gut reaction when entering for the first time. If you are selling your fully furnished second home, make sure it is clean and de-cluttered at all times as if a renter will be using the property. Just doing this, according to HomeGain, made homes and condominiums sell for close to $2400 more than the competing untreated properties. As for staging homes on the cape, if it is brand new and vacant, you may want to add a few pieces of furniture and touches to warm it up. However, there is no factual data to support that this will sell your property.

In my experience, the best thing to do is keep your house clean and ready for showings at any moment’s notice. Get rid of clutter and any extreme personal affects such as religious icons and an overload of family photos. 

The theory “less is more” is true in selling real estate. Just remember: Price it right, keep it clean and it will sell. Just be patient. 

Until it's a Deal

Overconfidence and complacency are two sister evils that can ruin any real estate transaction.

The old saying that a deal is not a deal until it’s a deal is true today stronger than ever before. Most real estate transactions are only as strong as the ink on the deposit receipt the teller hands the seller at the bank.

In all seriousness, today’s climate is making for stressful real estate transactions. Banks are no longer handing out money like they used to and financing guidelines are making it more difficult to obtain a home mortgage.

If that hurdle is crossed then there is the home inspection. Most buyers today are aware that they are getting a deal, however, some have decided to upgrade to a property a little higher in their budget than what they originally wanted. This is due to the fact prices are low. But, due to this, the buyer’s sense of caution is heightened and the home inspection becomes an all new important measure that is no longer just another step toward closing. Small issues now become major problems. Large items can ruin a deal. A skilled realtor, compromising seller and patient buyer are all need to make a deal happen today.

If all obstacles are overcome and the purchase and sale agreement is signed, there can still be problems that can sideline a transaction. The point here is to be very cautious on both sides and truly listen to what is being communicated. Only then, with diligence and intellect can both parties walk away from the closing table with smiles.

Otherwise, to use a sports analogy, with one minute left in the big game, don’t think you have a deal because you’ve gone undefeated all season. Otherwise you could end up being upset. Buyers and seller should now be keeping their eyes on the ball for the entire game until it’s officially over.

The Cost of Selling

The performance of the real estate market isn’t the only thing to hit rock bottom. This week we travel off cape to the west coast where an all new low was reached by a couple in San Diego, Ca. They decided to sue their real estate agent for selling them an overpriced property. 

The house in question was sold to the couple for over one million dollars in a neighborhood where homes were selling for similar prices. Upscale for sure.
Here’s where the homeowners have a beef with the realtor. They claim that the agent knew a comparable house sold for $150,000 less just two doors down. This house was 300 square feet larger and had a pool. They claim the realtor knew they were overpaying and pushed the sale to get a commission.

I’m usually not one to inject my opinion but I just have to say that this sounds like one of those frivolous lawsuits you hear about. Remember that woman who burned herself on a cup of coffee? Or the guy who cut his toe off with a shovel while working barefoot? Enough is enough.

The realtor in question has been in business for over 26 years. When you’ve been around that long your reputation is much more valuable than any commission can pay. The house was appraised high enough to justify a mortgage. The property next door may have had serious deficiencies in it or the seller may have been more motivated to sell the home. You never know what factors impact a seller’s judgment. 

When buying property at that price point, the consumer is typically on top of their game and knows what they are doing. Crying foul after the fact and blaming the realtor is par with a deadbeat tenant breaking an appliance in a rental unit and calling the board of health in order to get free rent. This screams of a scam.
This is buyers remorse gone insane and with the conditions of the market where they are, this couple should be thankful that they could afford a $1million dollar house and not clog up the system with a sleezy endeavor.

Fractional Ownership

Mike, can you address the question of fractional ownership? We are attempting to sell a condominium in the west end of Provincetown and our realtor keeps telling us to adjust the price. We’ve recently heard a real estate guru speak about maintaining home value by selling property fractionally? Tell me what this is.

This is a very good question and a topic that I’ve been asked to research by one of my clients. One obstacle we keep hitting is the collateral aspect. Each lendor wants to be in the number one spot if the payments are not made and the property needs to be sold. With short sales now happening, t is easy to see how banks fight for every piece of the pie before a foreclosure occurs. With fractional ownership, the financing is difficult if not impossible to do. Each lendor will be vying for the number one spot for receivership. When conveying an entire house with multiple buyers, the best way is to have the buyers set up a corporation or limited liability partnership. This, so far, has proven difficult when most people who would "buy in" to this type of situation are buying one and two bedroom condominiums that are now reasonably priced. In your case, the best hope is to find two or three friends who buy your condominium together.

2008 is projected to be the bottom of the market and the best way to sell your property right now is to price it right. Real estate sells if it is priced correctly and fractional ownership seems to me like a complicated gimmick created to sell over priced real estate that will ultimately fail leaving your property on the market longer making it a stale listing.

Use your realtor and the tools at his or her disposal.

Here are three basic things to check.

1. Have your realtor show you comparable properties that sold. Look at the closed prices.
   
2. Are there any defects that need to be accounted for that will impact the price
   
3. How many days was the property on the market before it sold.

Use a professional, price it right and toss the idea of fractional ownership in the trash.

Mortgage Meltdown

The mortgage meltdown has claimed its largest victim. Countrywide Financial, after being bailed out last year, is the latest to succumb. It will be assumed by Bank of America, and the buyout will be finalized later this year. 

This week The Closing Table is not about Countrywide or the tighter restrictions placed on potential mortgagors when looking to buy property. I thought I’d talk about optimism. Remember what it was like to get a mortgage ten years ago? Well, we’re pretty much there again. When you get approved it actually means you really are qualified to buy a house. One could say, these are a return to normal times. And with normal times comes optimism for a better future.

This year, we are already seeing excitement creeping back into the real estate market. Activity has been up in Truro and Provincetown. Buyers who have been spectator prospects for the past three years, are now putting themselves in the field and making the decision to buy. 

Although it is harder to get a mortgage and even the most seasoned mortgage brokers are sharpening their pencils, qualified buyers are recognizing that we are most likely at the bottom of the market. 

Even the so-called experts are saying that the first half of 2008 is the absolute bottom of the real estate crash. With mortgage rates recently decreasing, now under 6% for a 30 year fixed, qualified consumers are taking advantage of low listing prices and low interest rates. In 2009, this optimistic and toe testing consumer behavior, will turn into an all out feeding frenzy on low priced property, fueling buyer activity which will make the market come back with a vengeance.

This is an interesting prediction and one that I hope, proves to be true, for my clients’ sake, both buyers and sellers.

Energy-saving Tips

The price of heating oil these days could be worth more than its weight in gold.

With this in mind, there are some energy saving measures you can take to hopefully save money this winter.

If you were able to prepay for your oil, that was the best measure with the per gallon cost at $2.79 according to the local oil companies. However, this is a large amount to pay at once and many of us don’t have that kind of change hanging around.

If you locked into a pre-pay rate and could not pay ahead of time, price per gallon could be as much as $2.89. If you had the misfortune of not being able to take advantage of either of these, oil is now over $3.00 per gallon.

In this new oil crisis, here are some simple steps you may want to take:

Turn your thermostats to 65 degrees. Wear sweaters and housecoats along with slippers. The days of wearing shorts around the house in the winter should be over.

If you do not have new windows or storm windows, wrap your windows with a plastic thermal covering that prevents cold drafts and air from entering your home.

Get small rugs or draft stops to put by exterior doors. This will help. Also, for sliding glass doors, you may want to hang draperies.

Limit the amount of fires you have in an open fireplace as that sucks hot air out of a room. Always remember to shut the damper once the fire is completely out the next day.

With these helpful tips, you may be able to tip the scales on your home heating expense this winter.

2007: The Year in Real Estate Activity

This is a review of the single family and condominium sold activity in the outer cape towns of Eastham, Wellfleet, Truro and Provincetown for 2007.

In Eastham, 101 Single family homes and 17 condominiums sold in 2007 for a total of about $59 million dollars. In 2006 118 Single family and 13 condominiums sold for a total of about $64 million dollars. This is a difference of about $5 million dollars more being sold in 2006.

In Wellfleet, 64 single family homes and 16 condominiums sold in 2007 for a total of about $52 million dollars. In 2006 52 single family homes and 13 condominiums were sold for a total of about 38 million dollars. This is a difference of about $14 million dollars more real estate sold this year in Wellfleet.

In Truro, 33 single family homes and 20 condominiums sold in 2007 for a total of about $29 million dollars. In 2006, 30 single family homes and 19 condominiums sold for a total of about $31 million dollars. This is a decrease in the dollar volume of real estate sold in truro by $2 million dollars.

In Provincetown, 26 single family homes and 121 condominiums sold in 2007 for a total of $72, million dollars. In 2006 16 single family homes and 123 condominiums sold with a total dollar volume of $64 million dollars. Provincetown saw $8 million dollars more real estate sold this year than last.