Highlights from the Boston Real Estate Now blog.
Sellers who want to move up to a bigger house face a big problem in today’s market.
Sure, with prices rising, you are more likely to get a decent price for your old home. But can you actually find something to buy?
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With the inventory of unsold homes down as much as 30 percent from last year in some parts of Greater Boston, it’s a huge problem.
So far, overly ambitious home renovations don’t appear to be holding back the market.
That said, one way some move-up buyers have found to bridge the gap is by renting out their old house.
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Nearly 40 percent of buyers across the country say they plan to rent out the house they own now instead of selling it, a new Redfin survey finds.
That takes off the pressure to line up a house in a hyper competitive market, racing against the clock so you have a place to move into before the sale of your home closes.
And it might not necessarily be a money loser, especially if have a great rate on your mortgage and live in a market like Greater Boston, where rents have been relentlessly rising.
Meanwhile, 27 percent of those surveyed by Redfin say they won’t sell their house until they can find one to buy.
Can over-improvement halt a sale?
I often drive past a large, lavishly renovated turn-of-the-century house on the way to see my sister in Norfolk.
It’s been a couple months and the for-sale sign is still up. I peeked inside one day during an open house. It’s gorgeous, just like one of those dump-to-palace jobs that HGTV loves to profile.
But there’s a problem. Priced at a number approaching $500,000, it is out of place with the more pedestrian, older homes that surround it on either side of a busy road leading into Millis center. It’s a gem in a sea of peeling paint.
Still, are there so many of these over-improved homes out there that it is having a negative impact on the market?
Not sure, but the Massachusetts Association of Realtors says it’s concerned, offering this warning in a press release about the latest pending home sales:
“Over-improvement can result in houses that are out of step with the neighborhood, won’t recoup the investment and/or will permanently remove affordable homes from the stock available for first-time buyers,” said MAR president Peter Ruffini, regional vice president at Jack Conway Co.
Count me among the skeptics — so far, overly ambitious home renovations and expansions don’t appear to be holding back the market.
The number of pending sales — homes put under agreement but which have not changed hands yet — hit their highest level in February since the winter of 2004, the trade group reports.
The number of homes put under agreement hit 3,587 , a more than 20 percent increase over February 2013, while the median price surpassed $295,000, a 7.5 percent increase.
Pending condo sales rose 17 percent in February, according to MAR.
Why we buy
Buying and selling a house is not like buying and selling stocks, with lots of factors that make for an emotional and complex decision making process.
Why do people buy or sell?
Maybe they are planning to have kids and want to “settle down” in neighborhood or town with a decent school system. Or maybe they’ve hit retirement age and can’t deal with another New England winter, to name two big life changers that prompt people to act.
Really, there are a thousand and one reasons.
If you are lucky, prices are falling when it’s time to buy and soaring when you want to sell.
Given what we’ve seen in Greater Boston over the past few decades, the latter is more likely.
But unless you are willing to wait it out for five, who knows, 10 years — with no guarantee that conditions will be more favorable in the future — the real estate market you are in is the one you are going to have to deal with.
You’ve been dealt a set of cards and it’s up to you to play them wisely.