HOW TO TAKE ADVANTAGE OF TODAY'S REAL ESTATE MARKET

The Truth About Condos

How To Take Advantage Of Today’s Real Estate Market

TRUTH 1: If you don’t buy now, you may not be able to for a while.

Here’s why:

Interest Rates- Today’s home mortgage rates of around 6% are historically low, especially when inflation is almost 5%, as it is now. That means that home mortgage rates are probably on their way up, meaning it will cost more to own a home in the future, even if prices stay the same as they are today. And if you can qualify for a mortgage now, you may not be able to qualify later at the higher interest rates.

Supply and demand- There are less condo and new house developments being started than since 1991.

TRUTH 2: There will be more buyers competing for fewer homes in the near future.

Massachusetts new housing starts are at a 17 year low, meaning that there won’t be any new houses or condos being built for a long while. In the meantime, new household formations are in an upward trend.

TRUTH 3: We may have already hit the real estate “bottom”

We are in what the experts call “the trough”. That is where home prices have dropped and are staying where they are for a while. If you are waiting for the exact bottom of the market, it may have come already. According to Karl Case of the famous and highly regarded Case-Shiller Index of Real Estate Values, we may be in for a rebound sooner rather than later.

“… it’s worth noting that national housing starts last month fell below 1 million”, Case says. “Every single time we have gotten to this point, at this time, almost to the exact decimal point, things started to rebound,” Case told the Boston Herald. (May 9, 2008)

From the 1970s through the ’90s, the pattern repeats, Case says. “Eventually, steam runs out of a downturn,” he says.

TRUTH 4: Foreclosures are best left to professionals.

A condo that is being foreclosed on is usually not alone in the development. Watch out for condo fees in arrears, as that will make it hard to get financing.

TRUTH 5: There are some excellent deals, however.

If you are in the market for a condominium, developers are in the mood to deal. They are caught with their condos mostly sold out and they are trying to sell the remainder in a buyers market without spending too much money on advertising.

Your choices:

The Marketing Auction- Many condo developers have voluntarily auctioned off their condos with good success. Buyers have paid from $230 per s.f. for condos in Peabody or Middleton to $500 and above per s.f. for Boston condos. This works out well for condo developers who have a lot of units left, and can’t sell them. The bidders show up and compete for the condos in one fell swoop. “Units sold at higher price per square foot than that achieved by competition with 6 months of conventional sales.” according to the Velocity Marketing Co. website.

Developer Closeouts- There are a few new condo developments with only a few condos left. These may be the best deals as you buy in a development that has had strong sales, and the other happy owners are still paying their condo fees.

In the North Shore area, one of the best deals is Montserrat Condominiums in Beverly. It is a short 3 minute drive off of Route 128. There are only a few left out of 43, and the condos are really well built. They come with cherry cabinets, granite, stainless appliances, 2 tile bathrooms, central a/c, hardwood floors, and gas fireplaces. There are even heated toilet seats and heated towel racks.

TRUTH 6: It cost $240 per s.f. to produce these condos, but for the last few, you can buy them for $220 per s.f.

That’s 8% less than it cost to build, and 4% less than other “auction” condos went for.

Take advantage of the temporary buyers market and get a tremendous deal on a tremendous condo at Montserrat Condominiums.

Good luck in your real estate endeavors,

Dave Potter

BestNorthShoreCondos.com or call Tom @ 781-690-3600

Tom Welch is the listing agent at T. J. Welch & Co. Real Estate exclusive agent for Montserrat Condominiums.