The town continues to be attractive to first time buyers, and demand for Ranch and Split Entry style homes has remained fairly stable over the last 2 years thanks to near historic low interest rates and the First Time Buyer Tax Credit. In 2008 there were 92 sales of Ranch and Split Entry style homes in town (37.8% of all single family sales), and there were 88 in 2009 (39.6% of all single family sales). Values of Ranch and Split Entry style homes have also shown signs of stabilization over the past 12 months.

With certain exceptions, such as HUD-owned and bank-owned properties, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. However, beginning Feb. 1, buyers may use FHA-insured financing to purchase properties resold through private developers and investors, providing access to a broader array of recently foreclosed properties.

Under the temporary waiver, all transactions must be arm's-length. In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions.

For more information about these changes please visit: http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-011

If you, or anyone you know, is lookiing for an investment property, please do not hesitate to give me a call.

Click on the following link for answers to Frequently Asked Questions concerning the Tax Credit: http://www.realtoractioncenter.com/realtor-party/documents/2009-NAR-FAQ-Tax-Credit-Changes-1105-1236.pdf

There are currently two primary detection methods in use in modern smoke detectors: photoelectric and ionization. Ionization detectors typically have a constant current running between two electrodes and when smoke interrupts the current, the alarm sounds. Unfortunately, ionization detectors are prone to false alarms in areas near kitchens and bathrooms as they cannot differentiate between smoke and steam. Photoelectric detectors emit a beam of light, and smoke passing the path of the beam causes some light to scatter and directs the light at a sensor which triggers the alarm. Photoelectric detectors have been found to be less sensitive to false alarms caused by steam, but can take longer than ionization detectors to alert.  

The new regulations passed by the Board of Fire Prevention Regulation does not change the locations where smoke detectors are required, however, it does require the installation of both types of detectors in certain locations. A copy of the new regulation (527 CMR 32.00) can be found on this link: http://www.mass.gov/Eeops/docs/dfs/osfm/cmr/cmr_secured/527032.pdf

Under the new regulation, a smoke detector utilizing both technologies is required in all previously required locations, except within 20 feet of a kitchen or a bathroom containing a bathtub or shower. Compliance can be achieved by installing two separate detectors using these technologies, or by installing one detector which uses both technologies. Within 20 feet of a kitchen or bathroom containing a bathtub or shower, only a photoelectric smoke detector is allowed and an ionization detector is prohibited due to their tendency to be set off by steam.

WHAT PROPERTIES ARE AFFECTED BY THE NEW REGULATION?

Determining whether a specific property is affected by the new regulation requires a case-by-case analysis and, therefore, property owners are encouraged to consult with legal counsel to determine the specific requirements for their property. That being said, the new regulations apply if: (a) the building is under 70 feet tall; AND (b) contains less than 6 residential units; AND (c) has not been substantially altered since January 1, 1975. If your building fits all three of these conditions, the new law likely applies to you. If your property does not fit all of these categories, then the new law does not apply to you since your property is already subject to the more strict state law. In other words, for buildings taller than 70 feet, larger than 6 apartments, or which have been substantially altered since January 1, 1975, your property was already subject to a higher standard in relation to fire safety equipment, and therefore these new regulations do not apply. Finally, for those properties which are affected by these new regulations, compliance is mandated by January 1, 2010.

For additional information on smoke alarm and home safety, please visit: http://www.mass.gov/?pageID=eopsterminal&L=8&L0=Home&L1=Public+Safety+Agencies&L2=Massachusetts+Department+of+Fire+Services&L3=Department+of+Fire+Services&L4=Office+of+the+State+Fire+Marshal&L5=Public+Education&L6=Fire+Safety+Topics&L7=FS+Topics&sid=Eeops&b=terminalcontent&f=dfs_osfm_pubed_firesafetytopics_smokealarm&csid=Eeops

Just call the number at any time 24/7. You'll be prompted to enter the address, and then you'll be able to listen to current information on ANY listing on the market by ANY agency. There is even an option to get an estimated monthly mortgage payment, and you can be connected to me if you'd prefer.  This system also will email you the current listing sheet, and there is an option to receive the information by text.

If you are an NSTAR customer, there are rebates available to help reduce your total cost in making your home more energy efficient.

Was your home built before 1960? If so, there is a good chance your exterior walls are not insulated. If you are an NSAR customer and you are thinking about adding wall insulation, attic insulation or air sealing to your home you might be eligible for rebates up to $2,000 from NSTAR for these home upgrades.

Thinking about replacing your windows? NSTAR has a replacement window rebate program. Replacement windows can lower your annual heating costs by up to 15 percent and NSTAR gas heating customers are also eligible for a $10 rebate on every window replaced with an ENERGY STAR-labeled window with a U-factor of .35 or less.

For more information check out NSTAR's website at: http://www.nstaronline.com/residential/energy_efficiency/gas_programs/

Not an NSTAR customer? Don't worry, there are other options for you.

Did you know FHA and Fannie Mae have Energy Efficient Mortgages which allow homebuyers to incorporate the cost of eneregy efficient improvements. For more information, click on this link: http://www.greenmadesimple.com/incentives/search?cat[Insulation]=on&zip=&city=&state=&latitude=true

For more Massachusetts Rebates for Energy Efficiency, visit: http://www.goodtobegreen.com/ma_energy_rebate.aspx 

and

 http://www.masssave.com/

It's well worth the twelve and a half minutes to view: http://www.cbsnews.com/video/watch/?id=4668112n

The number of Active Single Family Listings throughout the Merrimack Valley has declined slightly over the past month (except for Tyngsborough and Lawrence where the number of active listings has remained unchanged when compared to this time last month).  However, the Average Days on Market (DOM) has increased in numerous towns. Declining inventory levels are a good sign, and as we near a balanced supply more towns should begin to see values stabilize. The number of transactions typically slow during the holiday season, so expect the DOM to continue to rise.

Single Family Market Data (as of December 4, 2008)

Andover:  102 Active Listings ranging from $230,000 to $3,075,000 with an average list price of $719,625. Average DOM 184.9 (up from 168). There are another 22 properties Under Agreement, and these properties had an average DOM of 119. The Average and Median Sales Prices increased slightly for the second straight month.

Billerica:  126 Active Listings ranging from $130,000 to $899,900 with an average list price of $380,505. Average DOM=209 (up from (187). There are another 26 properties Under Agreement, and these properties had an average DOM of 132.5. The average and median sales prices saw a slight drop for the second straight month; however, the average and median sales prices have remained relatively stable since March.  This could be a sign the bottom of the Billerica Single Family Market has been reached.

Chelmsford: 111 Active Listings ranging from $99,000 to $945,000 with and average list price of $418,602. Average DOM=138.9 (down from 147.6). There are another 15 properties Under Agreement, and these properties had an average DOM of 77. The average sale price dropped slightly for the fourth straight month while the median sales price increased slightly. Values in the lower half of the market have remained fairly stable while values in the upper half of the Chelmsford market remain soft. (the October numbers listed in the chart below does not include a sale of a $1,475,000 property which skews the numbers)

Dracut: 103 Active Listings ranging from $155,000 to $869,000 with an average list price of $346,828. Average DOM=171 (174.5 last month). There are another 41 properties Under Agreement, and these properties had an average DOM of 164. For the third straight month, the average and median sales prices have increased slightly. It appears the bottom of the Dracut single family market has been reached.

Lawrence:  92 Active Listings ranging from $39,900 to $370,000 with an average list price of $183,646. Average DOM=162.2 (up from 156.9). There are another 43 properties Under Agreement, and these properties had an average DOM of 117. While Foreclosures and Short Sales continue to dominate the landscape in Lawrence, the current number of active listings (92) represents a 5.9 month supply which is a balanced supply. The average and median sales prices have remained relatively stable since April which indicates the Lawrence Single Family Market most likely has reached its bottom.

Lowell: 234 Active Listings ranging from $59,900 to $1,100,000 with an average list price of $229,230. Average DOM=158.9 (156.5 last month). There are another 67 properties Under Agreement and these properties had an average DOM of 153.  Similar to Lawrence, the Lowell Single Family Market has numerous Foreclosures and potential Short Sale Listings.  The average and median sales prices decreased slightly, and are nearing the year to date lows we saw in July. There continues to be an over supply of homes for sale (currently an 8 month supply). Again, this market may be near its bottom but the over supply of inventory (especially during the winter months) is cause for concern and could lead to further decreases in sales prices as long as inventory levels remain above a 6 month supply.

Methuen: 179 Active Listings (down significantly from 205 last month) ranging from $76,950 to $899,995 with and average list price of $337,570. Average DOM=162.9 (up from148). There are another 35 properties Under Agreement and these properties had an average DOM of 139.0.  While the average sale price has remained relatively stable over the past four months, the median sales price declined slightly for the second straight month. The current inventory level, 6.75 month supply, is nearing a balance supply. As evident in the declining median sales price, the lower half of the Dracut market continues to see more activity than the upper half. The declining inventory is a good sign, and could lead to a stabilization of values if the trend continues.

Tewksbury: 80 Active Listings ranging from $145,000 to $899,000 with an average list price of $389,372. Average DOM=171.8 (169.3 last month). There are another 15 properties Under Agreement and these properties had an average DOM of 90.7. While the average and median sales prices have been stable over the past four months, the number of sales per month has declined over the same time period.  This, along with the current 6.9 month supply are causes for concern as values could decline if these trends continue over the next few months.

Tyngsborough: 59 Active Listings ranging from $139,900 to $950,000 with an average list price of $426,659 Average DOM=207.4 (up from 192). There are another 11 properties Under Agreement and these properties had an average DOM of 88.  The Tyngsborough single family market continues to lag behind its neighboring communities, and the 59 active listings represent an 8.4 month inventory which is a large over-supply. While there are a number of well maintained properties available, expect the sales prices to continue to gradually decline due to the large over supply of inventory. Buyers continue to have the upper hand in negotiations, and some owners have turned to the rental arena in lieu of selling their property. The typical monthly rent ranges from $1800 to $2500.

Westford: 97 Active listings ranging from $150,000 to $964,001 with an average list price of $497,765. Average DOM=184.45 (up from 165.5). There are another 8 properties Under Agreement and these properties had an average DOM of 170.  While the average and median sales prices have been relatively stable since August, there continues to be an over-supply (currently 7.9 months).

With only Andover (5 month), Billerica (5.4 month), Chelmsford (5.4 month), and Lawrence (5.9 month) having single family inventory levels less than 6 months (a 5-6 month supply is considered normal and balanced), Buyers continue to have plenty of properties to choose from. The number of transactions in most cities and towns has remained stable over the past few months, and inventory levels in most areas are continuing to decline.  This remains an excellent market for first time buyers, seasoned investors looking to add to their portfolios, new investors looking to build their portfolios, and those with equity in their current home who are looking to upsize or downsize.

Opportunity abounds throughout the Merrimack Valley. Inventory levels in most communities remain above 6 months (a 5-6 month supply is considered normal and balanced) which gives Buyers plenty to choose from. The number of transactions in most cities and towns has remained stable over the past few months, and inventory levels in most areas are continuing to decline.  This remains an excellent market for first time buyers, seasoned investors looking to add to their portfolios, new investors looking to build their portfolios, and those with equity in their current home who are looking to upsize or downsize.

Are we nearing the Bottom?

As inventory levels throughout Essex County and Middlesex County continue to decline and become closer to a balanced supply, some towns in the Merrimack Valley appear to be nearing the bottom.

Single Family Market Data

Andover: 124 Active listings ranging from $239,900 to $3,075,000 with an average list price of $707,914. Average Days on Market (DOM) =168.  There are another 24 properties Under Agreement and these properties had an average DOM of 100.8.  The average and median sales prices have remained fairly flat over the past two months, and market activity remains stable.

Billerica:  156 Active listings ranging from $144,900 to $899,900 with an average list price of $374,597. Average DOM=187. There are another 25 properties Under Agreement, and these properties had an average DOM of 89. The average and median sales prices saw a slight drop in October when compared to September’s numbers. However, the average and median sales prices have remained relatively stable since March.  This could be a sign the bottom of the Billerica Single Family Market has been reached.

Chelmsford: 124 Active listings ranging from $125,000 to $950,000 with and average list price of $427,906. Average DOM=147.6. There are another 15 properties Under Agreement, and these properties had an average DOM of 85.8. The average and median sales prices dropped slightly for the third straight month. Values in the lower half of the market have remained fairly stable while values in the upper half of the Chelmsford market remain soft. (the October numbers listed in the charts below do not include a sale of a $1,475,000 property which skews the numbers)

Dracut: 119 Active listings ranging from $160,000 to $869,000 with an average list price of $354,809. Average DOM=174.5. There are another 36 properties Under Agreement, and these properties had an average DOM of 99.3. For the second straight month, the average and median sales prices have increased slightly. This could be a sign the bottom of the Dracut single family market has been reached.

Lawrence:  95 Active listings ranging from $39,900 to $370,000 with an average list price of $178,775. Average DOM=156.9. There are another 40 properties Under Agreement, and these properties had an average DOM of 129. While Foreclosures and Short Sales continue to dominate the landscape in Lawrence, the current number of active listings (95) represents less than a 6 month supply which is a balanced supply. The average and median sales prices have remained relatively stable since April which indicates the Lawrence Single Family Market most likely has reached its bottom.

Lowell: 241 Active listings ranging from $65,000 to $1,100,000 with an average list price of $241,551. Average DOM=156.5. There are another 62 properties Under Agreement and these properties had an average DOM of 166.  Similar to Lawrence, the Lowell Single Family Market has numerous Foreclosures and potential Short Sale Listings.  While the average sales price increased for the third straight month, there continues to be an over supply of homes for sale (over a 7 month supply). The median sales price remained relatively stable in October when compared to September. Again, this market may be near its bottom but the over supply of inventory is cause for concern and could lead to further decreases in sales prices as long as inventory levels remain above a 6 month supply.

Methuen: 205 Active listings ranging from $76,950 to $899,995 with and average list price of $339,102. Average DOM=148. There are another 48 properties Under Agreement and these properties had an average DOM of 137.  The average and median sales prices have remained relatively stable over the course of 2008, however, both have dropped slightly over the past two months. This is most likely due to the over supply of homes for sale in this market. Similar to Lowell, the over supply is cause for concern, and expect the downward trend to continue as long as inventory levels remain above a 6 month supply.

Tewksbury: 95 Active listings ranging from $160,000 to $899,000 with an average list price of $390,112. Average DOM=169.3. There are another 13 properties Under Agreement and these properties had an average DOM of 78. This is a prime example of how pricing a home properly will result in a quicker sale. Improper pricing will cause a home to stay on the market long and become stagnant. While the average and median sales prices have been stable over the past three months, both are down when compared to this past summer. Inventory levels remain high, and are a cause for concern.

Tyngsborough: 61 Active listings ranging from $149,900 to $950,000 with an average list price of $418,715. Average DOM=192. There are another 13 properties Under Agreement and these properties had an average DOM of 100.  The Tyngsborough single family market continues to lag behind its neighboring communities. The 61 active listings represent a 12 month inventory which is a major cause for concern. While there are a number of well maintained properties available, expect the sales prices to continue to gradually decline due to the large over supply of inventory. Buyers continue to have the upper hand in negotiations, and some owners have started to turn to the rental arena. There are a number of single family properties available for rent in Tyngsborough.  The typical monthly rent ranges from $1800 to $2500.

Westford: 113 Active listings ranging from $150,000 to $975,000 with an average list price of $500,138. Average DOM=165.5. There are another 10 properties Under Agreement and these properties had an average DOM of 147.5.  While the average and median sales prices saw a slight increase in October, there continues to be a 7-8 month supply of homes for sales. The average and median sales prices are down when compared to the summer months. This is due in large part to the over supply of homes for sale.

The Town of Billerica continues to see steady demand, and the Median and Average Sales prices of single famiy homes in Billerica increased slightly for the second straight month.

The number of sales in Chelmsford, Dracut, and Tewksbury has remained relatively stable over the past three months, and the Median and Average Sales Prices have also remaine relatively stable.

The Towns of Andover, Tyngsbourough, and Westford saw a decrease in activitiy.

This market continues to be strong for First Time Buyers, and for those with equity looking to upsize to a larger home.

The single family markets in the cities of Lawrence, Lowell, and Methuen continue to be negatively affected by the large number of bank foreclosures.  Values and the number of sales remained fairly stable in the surrounding towns of Andover, Billerica, Chelmsford, Dracut, Tewksbury, Tyngsborough, and Westford. Tyngsborough saw a slight spike in May, but this was due mainly to the closing of a few properties in a new construction development.

In many areas, single family values have begun to stabilize. If inventory levels continue to decline and the number of sales remains steady, values should continue to stabilize as the supply/demand ratio becomes more balanced.

When it comes to Real Estate, it is important to look at Local Trends, not National Trends. I'm sure you've heard the saying "the most important thing in real estate is Location, Location, Location." I couldn't have said it better myself.

Real Estate can be broken down into two major categories: Commercial & Residential. But these markets can be broken down even further.  Residential markets can be broken down to: detached single family, attached single family, 1-4 unit, and condominiums.  These markets too, can be broken down further into additional sub-markets. I could go on for quite some time, so I will stop there. But I've seen it broken down to the point of a home on one side of the street would sell for 10% more than a model match home on the opposite side of the street.

Here is an example of why you need to look locally, not nationally(or even regionally).  I keep hearing on the radio, on TV, and even from other real estate professionals that things are "slow."  Well, I took a look at some sales data in my home town of Chelmsford, MA and this is what I found:

Chelmsford Single Family Sales (May thru July)
	2005	2006	2007	2008
# of Sales	104	71	94	89
Avg Price	$398,652	$427,577	$381,105	$360,846
Median Price	$376,000	$410,500	$360,000	$322,500
High	$710,000	$785,000	$775,000	$1,200,000
Low	$269,900	$220,000	$210,000	$152,500
Chelmsford Condominium Sales (May thru July)
	2005	2006	2007	2008
# of Sales	69	50	58	40
Avg Price	$252,488	$264,426	$278,527	$239,110
Median Price	$260,000	$262,250	$262,500	$224,000
High	$435,000	$450,000	$479,900	$442,000
Low	$108,000	$69,000	$108,000	$99,000
	Source:MLS Property Information Network

It is generally agreed on that the peak of the Chelmsford Residential Real Estate Market occurred in 2005.  While values are down since the peak, the chart above shows the number of sales in the typically busy months of May, June, and July have remained relatively stable over the past four years.

While the number of sales per year and per month have dropped since the peak in 2005, Chelmsford remains a desirable town. This is reflected in the high number of people who have and continue to buy homes in Chelmsford.

Chelmsford Single Family Sales (Jan thru Dec)
Year	# of Sales
2005	300
2006	222
2007	251
YTD 2008	149

Chelmsford Condominium Sales (Jan thru Dec)
Year	# of Sales
2005	241
2006	158
2007	153
YTD 2008	75

While the number of condominium sales in town has dropped this year (the numbers above are year to date as of August 13, 2008), with 4-1/2 months remaining in 2008 the number of single family home sales is on pace to fall within the range of the numbers seen in 2006 and 2007.

If you are thinking about buying your first home or selling your current home, things may not be as bad as the media is making it out to be. Do me a favor, check with a local real estate professional and find out what's going on in your neighborhood.

Remember to think locally,

John LaBelle - Real Estate Consultant

The reason for this bill is to help get buyers off the fence and reduce inventory levels.

Here’s is a summary of the how the credit works:

• If you have not owned a house during the past three years and can go to closing before the end of next June(2009), you may be eligible for up to a $7,500 credit against your federal taxes for 2008 or 2009 ($3,750 if you file taxes as a single person).
• This program is actually a 0% loan, not a true credit. The credit applies only to homes purchased on or after April 9, 2008, and before July 1, 2009.
• High-income home buyers don’t qualify: Eligibility begins phasing out for single filers with adjusted income of more than $75,000 and $150,000 for joint filers. It completely phases out at $95,000 for singles and $170,000 for married couples filing jointly.

Source: The Washington Post & Realtor.org

For more information, please read Kenneth Harney's piece from the Washing Post. (see the link below)

http://www.washingtonpost.com/wp-dyn/content/article/2008/08/01/AR2008080101248.html?sub=new

If you don't believe me, take a look at the recent activity. 

 As usual, May and June were busy months for closing attorneys, their staffs, the clerks at the Registry of Deeds, and moving companies (or friends with pickup trucks). Closings fell off slightly in July (the numbers below reflect sales through July 25th). However, July is historically a slow month as it is a popular vacation month.  I am expecting activity, especially in the first time buyer market, to pick back up over the next couple of weeks.  Condominium sales continue to be slow, however, there are good deals out there. There have been numerous new condominium developments created over the past 5-6 years which has saturated the condominium market in the Greater Lowell area, and has created an over supply. This has contributed to the declining condominium values.  The availability of affordable, entry level, single family homes in the area has also led many buyers to stray from the condominium market to persue single family options.