2023 Real Estate Observations (Arlington: refinancing, financing, resale)

[newenglandgal123]

Why don't folks have common sense? Do they feel they are immune to theft just because they live in Swellesley? lol https://www.necn.com/news/local/poli...doors/2971667/

[ca1337]

Originally Posted by MtPleasantDream

Also, a large part of the increase happened in 2020~2022.

Yes, I think this is a key point. But I wonder if over a 10-year period we can expect at least one such large boom, to coincide with the economic cycles. Also wondering if we can expect a slump now, similar to the stock market, as a countereffect.

[ca1337]

Originally Posted by jayrandom

Boston Magazine tracks prices over a 10 year period

Is there a chart somewhere showing the yearly price history with this level of granularity (town by town)?

[jayrandom]

Originally Posted by ca1337

Is there a chart somewhere showing the yearly price history with this level of granularity (town by town)?

Did you not see the link? That was a town-by-town list of appreciation. You can sort by appreciation in the last 10 years or last 5 years or last year. If you want at a finer scale you will have to mine the Boston magazine data yourself, I suspect.

Maybe this is easier to see: https://www.bostonmagazine.com/prope...ce-chart-2023/

[blueniteflower]

Originally Posted by ca1337

What rates are you folks on the ground seeing lately? Best I found with a stellar credit was 5.375% on an 7-year ARM. I was told majority of mortgages taken right now are ARMs (unsurprisingly)

My credit Union pioneer valley has 4.5 for 5/1 arm. We're taking that as it's far and away best rate and we'll refinance down the road if it makes sense. We do plan on aggressively paying it off as we value peace of mind over any potential investment gains.

[ca1337]

Originally Posted by jayrandom

Did you not see the link? That was a town-by-town list of appreciation. You can sort by appreciation in the last 10 years or last 5 years or last year. If you want at a finer scale you will have to mine the Boston magazine data yourself, I suspect.

Maybe this is easier to see: https://www.bostonmagazine.com/prope...ce-chart-2023/

I saw it and appreciate the link but it's a table vs. a chart showing evolution year by year on x-axis (line chart). I wanted to see the bumps and valleys and timing of those.

[ca1337]

Originally Posted by blueniteflower

My credit Union pioneer valley has 4.5 for 5/1 arm. We're taking that as it's far and away best rate and we'll refinance down the road if it makes sense. We do plan on aggressively paying it off as we value peace of mind over any potential investment gains.

That's really good! But it doesn't look like I qualify.

[jayrandom]

Originally Posted by ca1337

Oh definitely, I'm not saying "good" towns appreciate faster. But my question was about this subset of towns specifically. Like any investment, the lower you buy the higher the chance of large profit, IF you pick the right investment. It could stay low as well. You have to predict the future. That's where the risk/reward equation comes in. Also from a purely mathematical perspective, the lower the starting point is, the higher the % increase looks.

The housing market has been crazy and in the last 10 years, Newton has just about doubled in median listing price. I don't know how much of that is appreciation and how much of that is old houses being torn down and new, bigger houses going up in their stead. I suspect that a given house in Newton has not increased in value that full 100%. Even if it had, that isn't a 10% annualized return.

Compare that to VTSAX (Vanguard Total Stock Market). It was $38.93 this time in 2013 and is now $99.79. That is a 150% increase over the same time period. That actually is pretty close to a 10% annualized return.

Also, I question exactly what you mean with the bolded statement. There isn't a limit to prices. Buying something for $1 doesn't mean that it's a better theoretical investment than something bought for $10m.

[matrix5k]

Originally Posted by jayrandom

The housing market has been crazy and in the last 10 years, Newton has just about doubled in median listing price. I don't know how much of that is appreciation and how much of that is old houses being torn down and new, bigger houses going up in their stead. I suspect that a given house in Newton has not increased in value that full 100%. Even if it had, that isn't a 10% annualized return.

Compare that to VTSAX (Vanguard Total Stock Market). It was $38.93 this time in 2013 and is now $99.79. That is a 150% increase over the same time period. That actually is pretty close to a 10% annualized return.

Also, I question exactly what you mean with the bolded statement. There isn't a limit to prices. Buying something for $1 doesn't mean that it's a better theoretical investment than something bought for $10m.

Can real estate appreciation be compared to an index fund? You have to pay property tax, insurance, maintenance etc every year.

[matrix5k]

Originally Posted by ca1337

Yes, I think this is a key point. But I wonder if over a 10-year period we can expect at least one such large boom, to coincide with the economic cycles. Also wondering if we can expect a slump now, similar to the stock market, as a countereffect.

Depends on where you're talking about. In desirable towns, prices didn't really go down during the 2008 recession. Prices mostly stayed flat while less desirable towns/cities took a hit.