September 2010 Archives

The Warren Group reported Massachusetts' sales of single-family homes fell to their lowest level last month compared to the past twenty years. According to the Boston Herald, a total of 3,695 single-family homes were sold in the Bay State in August, which is the first time sales have plummeted below 4,000 in the month of August since 1987, when Warren first started tracking data.

The number of homes sold this past August resulted in an 18.5 percent drop from the 4,492 homes sold August 2009. Condominium sales also fell last month in MA, dropping 23.3 percent from the year before. Compared to the 2,113 condos sold a year ago, only 1,620 were sold in August. 

Even though home ownership has become more affordable with lower prices and mortgage rates, buyers have to overcome hurdles to close a deal. Issues such as backlogs in the mortgage process, stricter lending requirements, and appraisals that do not meet the proposed sale prices create some difficulty for house hunters. With lenders, appraisers, and underwriters requiring so much more paperwork to prove assets and income, The Boston Globe offers a few things to consider when applying for a home loan.

It takes 60 days or more to close a mortgage due to the flood of loan applications pouring onto lenders' desks. Because a longer approval period could cost you a good interest rate, think about asking for a 45-day lock at the same rate as what a lender offers on a 30-day lock. Low appraisals can ultimately break a deal, and a Boston real estate lawyer may advise buyers to renegotiate the purchase, put more money down at closing, or work with a lender to have a second appraisal.

Homeowners anywhere would be eager to live in a place where they are least likely to be underwater on their mortgages, or in other words have their mortgage dip below the property value. WCVB TV Boston shared a new MSNBC survey that placed three Massachusetts cities in a list of top ten places in the country where people are treading water on their mortgages, not going under.

Cape Cod, Springfield, and Boston made it to the top ten. Cape Cod ranked No. 4 because most people owed less on their mortgages than their house is worth. People in Cape Cod most likely had equity when they moved since only 6.9 percent of homeowners were underwater. Springfield came in sixth with 7.2 percent of homeowners underwater, and Boston was ranked ninth with 8.3 percent of homeowners owing more than their homes are worth.

WCVB Boston reports that one of the communities in the Bay State is also one of the most expensive. According to a new report by Coldwell Banker Real Estate, the Wellesley community is ranked the seventh most expensive real estate market in the nation. So, if you are looking for a real estate gem here, you may need to consult a Boston real estate lawyer.

Home listings in this Beantown suburb average close to $1.1 million between February and August of this year. This median price for a single family home has gone up 2.9 percent year over year. The demographics seem to reflect this price shift. The Norfolk county community has a population of just under 26,000. The average household income is $145,213 and approximately 88 percent of its residents have white collar jobs.  

While Mayor Menino has vowed to crack down in landlords with major code violations, there is one Boston landlord that says he will not be fixing his code violations. The Boston Herald reports that Candeloro J. Maggio told the paper, "I'm gonna do nothing."  He was referring to his property in the Hub that was housing illegal tenants who caused one of Boston's largest fires.

According to the Boston Herald, Candeloro Maggio said that he knew that his tenants were living in his complex illegally. He was also aware that these tenants caused a blaze on August 21 by shooting fireworks into his warehouse next door. The buildings owned by Maggio had electrical code violations, an illegal auto body shop with flammable liquids and exposed wiring, and hills of trash.

The Boston Globe reports that home seizures were at a record high this past August. This is the third time in the past five months that home seizures have hit a record. While bank repossessions of homes have risen 25 percent from last year, foreclosure filings have gone down 5 percent. In a statistic that would sober even a Boston real estate lawyer, every 1 in 381 U.S. households have been affected.

Foreclosures are estimated to add 12 million homes to the market. However, with the real estate market getting hit with high unemployment and the expiration of the homebuyer credit, demand has been low. As a result, sales of newer and older homes have fallen to a record low in July. Home prices have also taken a hit by 28 percent since 2006.

The Boston Globe reports that the controversial affordable housing law Chapter 40B is up for repeal by voters in the Bay State during the Nov. 2 state election. While a Boston real estate attorney can explain the law in more depth, it was a law passed in 1969 that allows builders to bypass certain zoning restrictions in municipalities that have less than 10 percent affordable housing.

As a result of the possible repeal of this law, Citizens' Housing and Planning Association has commissioned a study to illustrate how essential the law has been to the real estate market in Massachusetts. The study found that Chapter 40B has generated $9.25 billion in construction and related spending over the past decade.

While there are so many homeowners in the Bay State who are struggling with making payments on their mortgage, it may be tempting for these homeowners to try to "erase" delinquencies, judgments, or foreclosures from their credit reports with the help of a "credit repair" company. However, the Boston Herald reports that credit repair companies that make promises to erase problems from credit reports are often scams that take advantage of homeowners.

Under the Credit Repair Organizations Act, companies or individuals who claim to be able to repair consumers' credit reports are not allowed to make "untrue statements" about what they can actually accomplish. They also can't collect money up front. While that may be the case, a Boston real estate attorney can tell you that it still doesn't stop scammers from trying to take advantage of homeowners. Often, these companies try to advertise to homeowners via the internet, direct mailings, and even mortgage loan officers.  

The Boston Globe reports that a real estate fund comanaged by former basketball sensation Magic Johnson is interested in working with two other firms to invest in Northpoint Development. Investors are interesting in pooling a total of $1.5 billion over the span of 10 years in order to jumpstart the project. Investors plan on developing over 5 million square feet of retail, residential and commercial space in the project.

The project is definitely seen as an asset for many residents in the Bay State. Thomas N. O'Brien, managing director of HYM Investment Group told the Boston Globe: "We are feeling very confident we will produce a project that everybody will be proud of. This site can be a source of new construction jobs. It is a great site for the future of Massachusetts."

While we have written how frustrated some homeowners on the brink of foreclosure in Boston have been with the federal foreclosure rescue plan, Obama's administration is hoping to revamp the program in order to make it more effective. The Boston Globe reports that the Federal Housing Administration (FHA) will allow lenders to give borrowers federally backed refinanced loans. This is specifically for borrowers who owe more on their properties than the properties are worth.

Currently, the Obama administration has had a tough time trying to stave off the foreclosures hitting the nation. Almost half of the 1.3 million homeowners who had enrolled in the federal mortgage relief program have dropped out claiming that the program did little to help them. Homeowners also claim that the process was problematic; with banks losing critical paperwork or failing to inform borrowers of deadlines.

It seems like BID, Boston's first attempt at a business improvement district, may have its first obstacle ahead of it. The Boston Herald reports that Equity Office Properties which is Boston's largest commercial property owner, has decided not to participate in Downtown Crossings' BID program. While a Boston real estate lawyer can explain the details of the BID program, the program is intended to help struggling commercial areas in Boston through initiatives such as security, cleaning, marketing, and improvements.

If Equity Office Properties had agreed to join BID, it would have contributed close to $700,000 annually. There is a total of 16 percent of BID property owners who have declined to pay BID fees. These fees are on top of existing property taxes. However, the BID program has 84 percent of property owners who are willing to contribute close to $3.1 million in the first year. Rosemary Sansone, president of the Downtown Crossing Partnership told the Boston Herald:

Mayor Menino is ready to crack down on landlords in Allston and Brighton. WHDH Boston reports that Mayor Menino walked through some of the apartments offered to students and was displeased by the state of some of the rentals. He told reporters: "I wouldn't want my kid here, I wouldn't want anyone here this place is a pigs sty, and for a landlord to tell me it ok for a student to move in here, he's wrong."

Landlords blamed the problems with the units more on the tenants. However, that still did not stop city inspectors from citing violations that needed to be addressed. A Boston real estate lawyer can tell you more about the types of violations that you need to be on the lookout for, but most of the violations dealt with repairs. Kevin Watters, a Boston landlord said, "A lot of times what happens is tenants move out they leave a lot of things behind, they wreck the place while they live there, so all we have is a very short window in order to take care of these repairs."

Boston developer Michael David Scott, owner of Southeast Properties, has been indicted on federal fraud charges with regards to a real estate scheme that left countless abandoned properties in city neighborhoods. The Boston Globe reports that Michael David Scott was indicted on 62 counts of wire fraud, bank fraud, and money laundering. He is accused of fraudulently enabling borrowers, many of whom were low income, to borrow hundreds of thousands of dollars in order to buy condos in Roxbury and Dorchester.