Market Performance in January

Happy Friday as we wrap up not only this week but the first full month of 2009.

So how did the real estate market perform Provincetown through Eastham in January?

Lets take a look at pending sales.

In Provincetown there are 15 pending sales.

In Truro there are 14 pending sales.

In Wellfleet there are 9 pending sales.

In Eastham there are 12 pending sales.

What has sold? At the time of this reporting, the information I obtained for sold transactions is provided from the Multiple Listing Service. There is the possibility that a pending sale could have closed after this posting, but will not be recorded until Monday. I’ll let you know next week if that is the case, but for now,

Provincetown had 3 sales reported, last January there were 7 sales.

Truro had 1 sale, there were 3 sales last January.

Wellfleet had 2 sales this month, January of 08 there were 5 sales.

Eastham had 4 sales, last January there were 12.

A couple weeks ago, we discussed loan modification on The Closing Table. As an update, it appears that some in our government share our feeling that loan modification is needed to prevent foreclosures and protect home values from further depreciation. Massachusetts Attorney General Martha Coakley introduced legislation that will mandate lendors to modify risky mortgage products for struggling homeowners who are current, yet on the edge of falling behind. This is a common sense treatment for both the real estate market and economy and I’m surprised this hasn’t already come up. The Attorney General should be commended. Lets see how this plays out.

A New Administration: Do You Notice A Change Yet?

Happy Friday after what seemed like a short week with the Marin Luther King JR holiday and Inauguration Tuesday.

The new administration is four days young. Do you notice a change yet? With the interest rates as low as they are… and prices equally low, common sense says that buyers will snatch up property and with the potential that Obama will freeze foreclosures, value may stay constant.

There are now conflicting opinions as to when the real estate market will turn around. There is still hesitancy amongst buyers as an uncertain economy persists and strict mortgage requirements make it difficult for financing. The predicted extremes I’m aware of are that we will not see an increase in home sales until quarter 4 2010. On the other end, folks feel that the optimism generated by the administration will create activity this first quarter 2009. The reality may be in the middle somewhere.
If the economy shows signs of slight recovery, this could instill the confidence buyers need to let them know values will not decline further. 

In Provincetown, a market that seems unlike any other, we’ve seen an increase in shopping activity and right now there are 15 pending sales. 

On Monday, prior to the inauguration, we did see more inventory hit the market in Provincetown. Most of these were homes that were previously for sale in 2008. After Tuesday, there was one condo listed for sale and this was not previously listed. Although many sellers re-listed their homes, others continue to keep their homes off the market, either refusing to take a 10-20% decrease in value or are renting their homes to help prevent foreclosure. Right now there are 45 single family homes and 157 condos on the market for sale in Provincetown.

If there is a change in the positive direction, it will be slow, akin to a large ocean liner making a complete u-turn…wide and slow.

In the next few weeks we’ll keep tabs on how many new properties are listed for sale. If prices and inventory stay low… this could aid in any turn around.

Preventing Foreclosures

When it comes to preventing foreclosures and helping homeowner’s keep their properties, a little bit of common sense and compassion needs to be injected into the real estate mortgage industry.

Let’s take Countrywide Home Mortgage and Indymac Bank. Giants in the industry, who were saved from demise themselves last year, have it in their control to save homeowners from going under.
I’m a real estate professional and that makes for interesting conversation at dinner parties these days. People are talking about the difficulty they have encountered when trying to modify their mortgages to save their good credit rating.

I decided to see what is happening first hand. I called Countrywide and Indymac to find out what their policies are in regards to helping struggling homeowners, who are current, stay afloat. Both banks have the following plan: Don’t pay your mortgage for three months then they’ll talk to you. Until then, they won’t work with you, period. Indymac does have an online form that can be completed to put you on a waiting list, just in case you default.

Here’s the problem. Honest, hardworking mortgagors, who are now victims of the recession, are trying to make good. The inability of these banks to effectively address this large demographic, will only lead to more foreclosures and further deterioration of the real estate market and will ultimately further impact the failed economy.

I may be overly dramatic here, but with all the bailouts happening, what about the government directing these banks to prevent loans from even starting the foreclosure process and be proactive, rather than chasing fires as homeowners become delinquent. With the average cost of a foreclosure around $50,000 per bank, it just makes good business to work with loan modification. When a consumer’s credit is already negatively impacted, their level of motivation to work with a bank and prevent foreclosure is dramatically different than when they have something to save. 

Year End Review for Provincetown, Truro, Wellfleet and Eastham

All eyes are on the real estate market as it enters its fourth year of challenge, uncertain interest rates, low prices and a worldwide recession. Buyers are looking and there has been an increase in shopping activity, Provincetown through Eastham. But buyers are reporting they are waiting to pull the trigger until after the inauguration in two weeks. There is speculation that mortgage interest rates will drop to 4.5% across the board. This will mean huge opportunity and has generated many inquiries regarding active properties.

How did the market perform in 2008 compared to the previous three years?

I’ll break down the numbers for you right here. These numbers include all categories of real estate sold.

See my Web Site's Real Estate Blog (click here) for 2008 dollar volume and units sold figures for Provincetown, Truro, Wellfleet and Eastham.

2009 promises to be a year of change for many aspects of the real estate market on the Outer Cape. Check back here weekly on Friday morning for updates.

Call me at 508-789-1107 or email me mike@atlanticbaysir.com if you have questions or would like to post an entry.