2021 Real Estate Observations (Boston, Weymouth, Acton: commute to, paid, expensive)

[Shizim]

Originally Posted by MikePRU

I had heard that. I'm sure refi's are making up a very small percentage of a lender's business at this point. If you haven't refinanced your home during the very long period of time that rates were in the 2's and 3's then you've missed the boat at this point and will probably be waiting a while for rates to get back down there.

For sure but there were still some stuff that was locked but didn't close. All that has been washed through by now. And layoffs tend to lag the drop in business.

[GeoffD]

Originally Posted by Shizim

For sure but there were still some stuff that was locked but didn't close. All that has been washed through by now. And layoffs tend to lag the drop in business.

How long does it take to close on a refinance? I've never done one. It looks like 30 year fixed was in the 3's on March 10. With a purchase, it wouldn't be unusual for a property that went under contract on March 10 to not have closed yet.

[simplexsimon]

Originally Posted by GeoffD

How long does it take to close on a refinance? I've never done one. It looks like 30 year fixed was in the 3's on March 10. With a purchase, it wouldn't be unusual for a property that went under contract on March 10 to not have closed yet.

I don't know about these days but I closed on a refinance in ~30 days back in August 2020.

[Shizim]

Originally Posted by simplexsimon

I don't know about these days but I closed on a refinance in ~30 days back in August 2020.

all the stuff from march has for sure closed. I was thinking of stuff that locked at the end of the year that just washed out in march. There is usually a lag, but demand has been dropping like a stone so its no longer pertinent.

it took 5 months to close my refi. Company was overwhelmed. they kept pushing out the lock so i wasn't overly concerned.

[WestieWhitie]

It should be very interesting to see what happens to all the recent FOMO buyers when it’s time to sell a few years down the road and no one can afford seven figure mortgages with rates in the upper 5s.

[msRB311]

Originally Posted by WestieWhitie

It should be very interesting to see what happens to all the recent FOMO buyers when it’s time to sell a few years down the road and no one can afford seven figure mortgages with rates in the upper 5s.

I don't understand this. Are you saying that if someone who bought in 2020 goes to sell in 2026 they wont get much back?

If someone bought a house for 900k in 2020 i would hope they'd be hanging on to it longer than just 6 years.

I recall someone i knew bought a house in hingham in 2007 for 700,000 or so. 8 years later it was worth the same amount....however these people will probably retire in that home so while that probably sucked I think people in that situation will be ok.

I have thought of this myself as we purchased in 2020. IF things even tank i'm not particularly worried because we have no plans to see in the near future.

If someone was looking to make money back on a house after just 5 years then they could be in trouble

[massnative71]

Originally Posted by msRB311

I don't understand this. Are you saying that if someone who bought in 2020 goes to sell in 2026 they wont get much back?

If someone bought a house for 900k in 2020 i would hope they'd be hanging on to it longer than just 6 years.

I recall someone i knew bought a house in hingham in 2007 for 700,000 or so. 8 years later it was worth the same amount....however these people will probably retire in that home so while that probably sucked I think people in that situation will be ok.

I have thought of this myself as we purchased in 2020. IF things even tank i'm not particularly worried because we have no plans to see in the near future.

If someone was looking to make money back on a house after just 5 years then they could be in trouble

If you plan on being there for the long run, sure you will be fine. If you were an out of state buyer coming in with your blinders on and oblivious to the fact that a cape in Dedham is simply not worth 7 figures under any state of normalcy, and you were planning on selling and moving back to "wherever" once you "did your time" (2-3 years or whatever) in Boston...you will be F@C#%D. If your job gets outsourced and you have to settle for 1/2 pay for a while, you will be (I don't have to say it). If a medical thing comes up (or any "life happens" event), well you better be prepared for that as well because you will have no equity to fall back on.

[msRB311]

Originally Posted by massnative71

If you plan on being there for the long run, sure you will be fine. If you were an out of state buyer coming in with your blinders on and oblivious to the fact that a cape in Dedham is simply not worth 7 figures under any state of normalcy, and you were planning on selling and moving back to "wherever" once you "did your time" (2-3 years or whatever) in Boston...you will be F@C#%D. If your job gets outsourced and you have to settle for 1/2 pay for a while, you will be (I don't have to say it). If a medical thing comes up (or any "life happens" event), well you better be prepared for that as well because you will have no equity to fall back on.

yeah these things can be hard to predict. i mean people's real estate investments grew a lot from 2014 to 2021 for example...so those folks would be fine. I dont know what will happen. Everyone says something bad is coming as far as real estate goes around here but time will tell.

My neighbor is a real estate person and thinks the cape will have a lot of foreclosures.

[MikePRU]

Originally Posted by msRB311

yeah these things can be hard to predict. i mean people's real estate investments grew a lot from 2014 to 2021 for example...so those folks would be fine. I dont know what will happen. Everyone says something bad is coming as far as real estate goes around here but time will tell.

A lot of the articles I'm reading are saying that any recession which may or may not be coming down the pipe right now will be remarkably different from the last one. I'm reading that it's unlikely real estate values will be hard hit as "bad loans" are not the cause of our possible upcoming economic woes. Going into whatever is to come, people who have received mortgages in the last 10 years or so have been much more thoroughly vetted than anyone who received a mortgage in the 10 years prior to that.

Originally Posted by msRB311

My neighbor is a real estate person and thinks the cape will have a lot of foreclosures.

It's possible. I am reading a lot that a recession is likely coming but it shouldn't be anywhere near as bad as the last one. I would also add that second home markets and areas with a primarily "vacation industry based" economy like the Cape, Florida, etc. are often the first to get hit in a downturn and they usually get hit the worst. What happens in these areas usually has little bearing on what happens in primary home markets like the Greater Boston area.

[WestieWhitie]

Originally Posted by msRB311

yeah these things can be hard to predict. i mean people's real estate investments grew a lot from 2014 to 2021 for example...so those folks would be fine. I dont know what will happen. Everyone says something bad is coming as far as real estate goes around here but time will tell.

My neighbor is a real estate person and thinks the cape will have a lot of foreclosures.

Those who don’t need to sell will be fine - they might have paid an insane price but assuming they locked in at a low rate their mortgage will be manageable. It’s those who need to sell who will be in a whole lot of pain - current prices are simply not sustainable in the long run with rates at 6% instead of 2% and will be quite a shock realizing you can only get $750K while owing $1,000,000.