Kathy & Terry Sullivan

Kathy: 978-927-9199


RE/MAX Advantage Real Estate
Boston's North Shore, Essex County MA

Offices: Beverly, Gloucester, Marblehead, Peabody, Salem MA

Luxury Homes Waterfront Properties Condos
Multi Family Investment Properties Land All MLS

Judith Coughlin


Buyer Specialist
RE/MAX Advantage Real Estate, Beverly, Marblehead, Salem, Peabody, Gloucester, MA

How Solar Panels Can Kill A Sale

Solar Panels Can be a Deal Killer

Studies have suggested that the addition of solar panels on a home can boost a home's value. But sometimes those solar panels can sabotage a deal when it comes time to sell.

More companies are offering home owners a contract to lease solar panels where they pay no upfront costs for the installation and could start saving on their electricity bills right away. But home owners who sign onto these deals are finding some snags when they go to sell.

Potential buyers are leery of taking on the leasing payment contracts for the next 15 to 17 years because they often have to qualify on credit from the solar companies themselves. Also, some buyers are hesitant to sign a contract because they're concerned the solar equipment will become obsolete or won't amount in a big savings in the end after paying the leasing fee.

Some home buyers are refusing to buy the house unless the seller buys out of the remaining lease payment stream -- which could be $15,000 or more.

Source: "Leased Solar Panels Can Complicate – or Kill – a Home Sale," The Los Angeles Times

MA Unemployment Rate for Feb Drops To 4.9%


BOSTON, MA -March 19, 2015 

MA unemployment rate drops to 4.9% from 5.1% in Jan and 6.0% in Feb 2014. The labor participation rate, the share of working age residents employed, rose to 65.9% up 0.3% from Jan and up 1% from a year ago.  There were 3,430,500 residents employed and 177,300 unemployed in Feb. 


3% Down For First Time Home Buyers - Fannie and Freddie


3% Down Payments For First Time Home Buyers


Mortgage giants Fannie Mae and Freddie Mac announced Monday that first-time home buyers can now qualify for loans with down payments as low as 3 percent. That will expand credit for qualified home shoppers who may have been sidelined the last few years because of higher down-payment requirements, housing analysts say.

Freddie Mac launched Home Possible Advantage, a conventional mortgage with a 3 percent down-payment requirement geared to low- and moderate-income borrowers. It's a conforming conventional mortgage with a maximum loan-to-value ratio of 97 percent. To qualify, first-time home buyers are required to participate in a borrower education program.

With Fannie Mae's 3 percent down-payment offering, borrowers must still meet standard eligibility requirements, including underwriting, income documentation, and risk management standards. Any buyer can take advantage of Fannie's loans as long as at least one co-borrower is a first-time buyer. The loans will require private mortgage insurance.

"Our goal is to help additional qualified borrowers gain access to mortgages," says Andrew Bon Salle, Fannie Mae executive vice president for single-family underwriting, pricing, and capital markets. "This option alone will not solve all the challenges around access to credit. Our new 97 percent LTV offering is simply one way we are working to remove barriers for creditworthy borrowers to get a mortgage."

The National Association of REALTORS® applauds the move by the Federal Housing Finance Agency, which oversees Fannie and Freddie.

NAR said in a statement that the action by FHFA demonstrates its "commitment to home ownership by serving creditworthy borrowers who lack the resources for substantial down payments, plus closing costs, with a new 3 percent down-payment program that mitigates risk with strong underwriting. The new program ensures that responsible home buyers will have access to safe, affordable mortgage credit."


Source: Fannie Mae and Freddie Mac

Boston Ranks Third Globally In Office Rent Growth (+12.2%), First in Capital Value Growth (+34.6%)

Boston Ranks Third Globally In Office Rent Growth (+12.2%) and First in Capital Value Growth (+34.6%)
Greater Boston moved up 10 spots to seventh globally in a survey of metro areas' commercial real estate markets and economic vitality.
JLL's 2015 City Momentum Index ranks 120 cities in 37 categories related to the vitality of their economies and commercial real estate markets. The top five cities in this year's index were London, San Jose, Beijing, Shenzhen and Shanghai.
The Boston area had the third-fastest-growing office rents worldwide in 2014, trailing only Singapore and San Francisco, according to a survey of metro areas by JLL. Rents locally increased 12.2 percent, according to the report.
JLL Strategic Research Director Lori Mabardi said Boston's innovation economy and strong university presence accounted for the city's move up in the rankings.
Boston ranked first globally with a 34.6-percent increase in capital value growth.
Foreign investors drove up prices of the Boston region's commercial real estate, with investors such as Toronto-based Oxford Properties Group and Norges Bank Investment Management buying trophy office buildings in Boston and Cambridge.
The index is designed to identify which cities are changing the fastest by combining real estate data with socioeconomic factors.
Short-term economic variables such as changes in GDP and population, air passenger traffic and corporate headquarters presence represent 40 percent of JLL's model. Short-term commercial real estate measures represent 30 percent of the model. The remaining 30 percent is based upon factors likely to affect future economic strength, including educational infrastructure, patent applications and presence of investment firms.

Rental Population Rises, Pushing Rents Higher. Lack Of Savings Obstacle To Buying



Renters made up the majority of the population in cities at the core of nine of the nation’s 11 largest metro areas in 2013, a sharp change from 2006, when renters were the majority in just five of those cities, according to a new report.

Cities have always had a larger number of renters when compared with suburban areas, in part because the cost of owning a home within a city’s limits is out of reach for many residents, especially in high-cost places such as New York, San Francisco and Washington, D.C.

A resulting demand for apartments is rising so fast that it is starting to overwhelm supply in many cities, which is pushing up housing costs nationwide. “As the number of renters grow, if the supply of rental housing does not keep up—as it has not in most of these cities—then vacancy rates will fall, rents will rise, and more renters will struggle with the costs of housing,” said Ingrid Gould Ellen, the Furman Center’s faculty director.

In some cases, the rise in the number of renters reflects a reversion to levels before the housing boom, when easy credit and no-down-payment mortgages allowed many renters to become homeowners. Once the boom turned to bust, people went back to renting, either because they lost their homes to foreclosure or they became skittish about owning. In Chicago, renters made up 53% of the population in 1990, then dropped to 46% at the height of the housing boom in 2006 and returned to 52% in 2013.

In other cases, long-term demographic trends and changing attitudes have diminished the appeal of the traditional American dream of homeownership. In Houston, just 41% of the population were renters in 1970. The rate rose to 51% by 2000 then declined slightly during the housing boom before starting to rise again, hitting 54% in 2013.

But for many, slow income growth and a lack of savings are the main reasons for renting instead of buying, even as mortgage rates remain historically low. Accumulating savings has become even more difficult as rents rise in many cities. Rents outpaced inflation in all of the 11 cities except for Dallas and Houston, where they remained largely flat, according to the NYU-Capital One report. Rents rose the most in Washington, D.C., over the seven-year period, with a 21% increase in the median rent when adjusted for inflation.

For full article go to:  http://goo.gl/dcHJiM

MA December Unemployment Rate Drops to 5.5% from 5.8%; 10,900 Jobs in Dec.

Massachusetts adds 10,900 jobs in December
Unemployment Rate Drops to 5.5%

BOSTON, MA - January 22, 2015 ---  The Executive Office of Labor and Workforce Development (EOLWD) today reported that preliminary estimates from the Bureau of Labor Statistics (BLS) show Massachusetts added 10,900 jobs in December for a total preliminary estimate of 3,447,600.  The December total unemployment rate was 5.5 percent, down 0.3 of a percentage point over the month.

Since December 2013, Massachusetts has added a net of 60,900 jobs; with 58,400 jobs added in the private sector. The total unemployment rate for the year is down 1.6 percent from the December 2013 rate of 7.1 percent.

BLS also revised its November job estimate to an 11,700 job gain from the 13,500 gain previously reported for the month.

New Fannie Mae Appraisal Process Will Likely Push Down Appraisal Values


New Fannie Mae Appraisal Program: Helping or Hurting?

Posted: 14 Jan 2015 04:00 AM PST

New Fannie Mae Appraisal Program: Helping or Hurting? | Keeping Current Matters 
Every home must be sold TWICE! Once to the buyer, and once to the bank appraiser if a mortgage is involved.


The second sale may have just become more difficult.

A new program announced by Fannie Mae may slow down the home-sale closing process by causing more disputes over prices between sellers and buyers. In a recent Washington Post article they explained the basics of the program:
“Starting Jan. 26, Fannie plans to offer mortgage lenders access to proprietary home valuation databases that they can use to assess the accuracy and risks posed by the reports submitted by appraisers.”  “The Fannie data will flag possible errors in the appraiser’s work before the lender commits to fund the loan, will score the appraisal for overall risk of inaccuracy and may provide as many as 20 alternative “comps” — properties in the area that have sold recently and are roughly comparable to the house the lender is considering for financing but were not used by the appraiser.”
Using the additional information provided by Fannie Mae, the lender can then ask for an explanation from the appraisal company for any discrepancies and request an amended appraisal. This added step in the process of determining the price of the home to be bought/sold, could add time to the closing process and cost to the appraisal for the additional work.


Why is this happening?

Fannie Mae wants lenders to make informed decisions when agreeing to the amount of a loan that a buyer will be approved for.
“Excessive valuations create the risk of future losses to lenders and investors if the borrower defaults and the house goes to foreclosure.”


What is the process now?

As a seller:

You’ve put your house on the market, picked an agent who has helped you determine that the best price to list your home for is $250,000, and found a buyer willing to pay that price. The appraiser comes to the home and agrees your home is worth the asking price and writes their report. Everything is working perfectly!


As a buyer:

You’ve found your dream home, in the right neighborhood, in the right school district, with the perfect yard, at the high end of your budget, but all the pluses are worth it. You agree on a price and start daydreaming about living in your new home.


What happens after January 26th?

The lender submits the appraisal report to the new Fannie Mae program and they come back with “lower-risk comps” that value the home at $230,000. The lender then turns to the appraisal company to justify the $20,000 difference, adding time and frustration to the process. If the lender does not agree with the reasons for the price difference they will not lend the buyer the amount they need to purchase their dream home and the amicable, agreeable sale turns into a heated justification of the higher price. The buyer may even have to give up on the home if the funding isn’t there. An article by Housing Wire shares the appraiser’s point of view:
“The bottom line, appraisers say, is this could lead to delays to closings and higher costs, as well as a depression of prices in markets where prices are rising. Appraisers complain that if they have to justify every step of their comps for their valuation, rather than those coming from the one-size-fits-all evaluation from Fannie, it will delay closing, throw off buyer and seller timetables, and delay real estate broker commissions.”


Bottom Line

The fear of some real estate practitioners is that if appraisers feel as though they are constantly being second-guessed, they may become more conservative in their assessments, impacting home values and slowing growth in the market.

Winter Special - Mortgage Rates at 3.74% - Nice Buying Opportunity

NAR 2015 Outlook: Resales Up 7%, New Construction Sales Up 30%

National Association of Realtors Forecast for 2015: Existing Home Sales Up 7% and New Construction Could rise 30%. 

Inspite of  improvements in the jobs market, increasing population growth, rising residential rents, improving inventory, record high household net worth and low mortgage rates, residential sales will be 2% lower in 2014 than 2013 - a mystery!

Because the major factors effecting housing are positive, NAR feels this will drive rising sales in 2015: existing home up 7% and new constuction could surge 30%. 

Factors for Improving Home Sales

By Lawrence Yun, Chief Economist, NATIONAL ASSOCIATION OF REALTORS® , http://goo.gl/1VCMiH

Nearly every factor generally associated with home sales has been turning for the better. We have more jobs, growing population, rising rents, additional inventory choices, record-high household net worth, and exceptionally low mortgage rates. On top of these trends, there is accumulating pent-up housing demand from people who underwent distressed property sales several years ago. The penalty period has timed-out and a steadily increasing number of families should be welcomed back to the market. Even rising home prices, though in one sense this is a negative for transactions as they cut into affordability, are bringing existing homeowners out of underwater status and into the game. Rising home prices and the prospect of such a trend can also act as a confidence booster for homebuyers knowing that they will build equity over time.

Despite these positive developing forces, the only variable that refuses to improve has been home sales. Home sales (new and existing combined) look to have declined about 2 percent in 2014. The numbers and logic are not adding up – at least they did not in 2014. It should, therefore, naturally mean that numbers and logic have to prevail in the upcoming years. A soft year in 2014 should mean a robust year in 2015 and beyond.

Let’s revisit the logic by examining each of the factors in detail and see how this should effect housing in 2015.

Read More »

Q3 GDP Up 5%, Strongest Growth in 11 Years - Dow At Record Highs

U.S. Economy Posts Strongest Growth in 11 Years

http://goo.gl/xzqR09  Updated Dec. 23, 2014 8:06 p.m. ET

Commerce Department said the U.S. economy expanded at a 5% seasonally adjusted annual rate in the third quarter, its strongest pace in 11 years, and reported that consumer spending accelerated last month amid rising incomes and falling gasoline prices.


A big question remains: Can consumers sustain the momentum into 2015? 

There still are signs the economy is far from full health. Inflation remains low and has sagged lower in recent months, largely because of falling oil prices. Low inflation and sagging commodities prices are a possible signal of weak underlying demand, particularly overseas. Wage growth remains sluggish, though there have been glimpses in recent data of a potential pickup. Gains in labor productivity have been slow.

Weakness around the world could reduce demand for U.S.-made products, and a stronger dollar could further depress exports by making them more expensive overseas.  

Fed officials expect full-year growth will come in below 2.5%, marking 2014 as only a slight pickup from recent years.  
But officials see growth strengthening to between a 2.6% to 3% rate in 2015.

The housing market has yet to return to prerecession levels despite low mortgage rates and strong job growth. Sales of new single-family homes fell for the second straight month in November and are essentially unchanged this year from 2013, the Commerce Department said Tuesday.

Inflation, meanwhile, remains tame. The Fed’s preferred gauge, the Commerce Department’s personal consumption expenditures price index, slipped to a 1.2% annual gain in November from 1.4% in October. It was the 31st consecutive month that inflation undershot the central bank’s 2% target.

The unemployment rate was 5.8% last month, down from 7% a year earlier, according to Labor Department data.

Personal income rose 0.4% last month from October and climbed 4.2% from a year earlier, the largest annual income gain since December 2012, the Commerce Department said.

Eric Morath And , Ben Leubsdorf, Jonathan House, Kathleen Madigan and Josh Mitchell contributed to this article.