The Federal Housing Authority is providing life support to the housing market in Boston and across the country.  Yet at the same time, it is enforcing new regulations that will make it far more difficult for working class condo owners to sell their properties to new clients.  So, while the deals are out there, be prepared for lots of paperwork and delays:

THE FEDERAL Housing Administration has been busy lately, propping up the housing market. The FHA’s out-sized role in real estate has earned it intense scrutiny on Capitol Hill, where legislators are already choking on the staggering tab Fannie Mae and Freddie Mac are sticking them with. To its credit, the agency is moving decisively to repair its balance sheet and avoid a government bailout…

…But in Boston, one recent FHA move is sowing some unintended consequences: It’s threatening to wall off entire neighborhoods in the city and close-in suburbs from the working-class homebuyers the FHA serves. These buyers are running into trouble because of a quirk in Boston’s development history that has left a permanent imprint on the city’s geography….

…Scores of double- and triple-deckers have been chopped up into condos over the past decade. In large tracts of Dorchester, Hyde Park, Jamaica Plain, Cambridge, Somerville, and Everett, there are few single-family homes, and even fewer buildings with condo associations that have cared to submit themselves to FHA scrutiny. People would rather not wade through a thicket of red tape, if it can be avoided.  So, essentially, huge portions of Greater Boston are off limits to homebuyers. That’s because, for working-class home buyers, an FHA loan is all there is…

…Boston’s future as a vital and diverse organism lies with post-grads and young families – groups that would gladly take the city over the suburbs, if only someone would give them a mortgage. The longer urban neighborhoods remain closed to them, the more we invite a lifeless fractured split along class lines, with the rich on one side, the poor on another, and everybody else stuck waiting on the commuter rail.

Article by Paul Mcmorrow, from the Boston Globe, June 18, 2010.

For Questions about FHA Financing and Special FHA Offers, Please call Jason Schuster at 617-756-3029.

Over 1 billion people across the globe watch the World Cup every year.  And in the greatest moment in American soccer history, Landon Donovan, scored a goal in the final minutes to send the USA to the Group of 16 in the most important sporting tournament in the world.  The next match is Saturday at 2PM against Ghana, who knocked the Unites States out of the tournament in 2006.  Proper Realty Group wishes the USA the best of luck as they fight on to lift the most beautiful trophy in sports.

Landon Lives Proper

Land of the Free

The Wall Street Journal provides more proof that the $8,000 Housing Tax Credit worked:

The housing-market boost driven by government home-buyer tax credits has faded, damping builders’ incentives to construct new homes in May. Meanwhile, U.S. industrial production strengthened as a key inflation indicator remained tame in the face of a sluggish recovery. U.S. housing starts plunged by 10% to a seasonally adjusted annual rate of 593,000 in May, the month after the government ended its home-buyer tax credit.

Single-family housing starts slid 17.2% to an annual rate of 468,000, the lowest level in a year. Permits for new construction also declined, the Commerce Department said. “The plunge in housing starts in May underlines that a sustained housing rebound has yet to get under way,” said Nigel Gault, chief U.S. economist for IHS Global Insight. “Now the credit is gone, it’s time for the payback.”

The decrease in May starts confirmed fears that a fitful recovery could falter with the April 30 end of a tax credit created early last year for first-time home buyers. The tax relief spurred sales and construction. Even though prices and mortgage rates are low, the job market is weak. “Starts should be soaring at this point of the business cycle,” said Ken Mayland, president of ClearView Economics.

But builders are having trouble getting financing, and many buyers are looking to existing homes instead of new homes. Existing homes are cheaper than newly built homes—even more so with the foreclosures that drove down prices. Builders are also cautious about a surplus of unsold homes, including a so-called shadow inventory made up of property withheld from the market because of low prices. When prices climb enough, that inventory will flow into the market.

Still, even though single-family housing starts dropped sharply in May, apartment construction rose. Apartment construction—housing with two or more units—rose 33% to an annual rate of 125,000. Within that multifamily category, groundbreakings of homes with five or more units were up by 38.3%.

From Bloomberg Business Week:

In the first quarter, the Boston area had the second-largest home price increase (6 percent) among the 50 metros surveyed, according to CoreLogic data. A report by the Concord Group, a real estate consultancy, projects recovery (or sustainable home sales and price appreciation) in the metro Boston housing market in late 2011, ahead of other areas. Boston, supported by a strong education sector, was hit earlier and less severely by the housing crisis than other places, and the unemployment rate here has stayed below the national average.

Does anyone have any personal stories out there to back up this report?  It seems that reports like this and this might contradict the Concord Group’s rosy findings.  So, while mortgage rates may be at historically low levels, pessimism from industry leaders, consumers, and home builders has the potential to stall Boston’s housing recovery.  Still, being #2 is not that bad.  Unless your the Celtics.  Live Proper.

PROPER REALTY GROUP WISHES THE BOSTON CELTICS THE BEST OF LUCK AS THEY SEEK TO CLOSE OUT THE NBA FINALS IN LOS ANGELES FOR THEIR RECORD 18TH NBA CHAMPIONSHIP!!

Live Proper in 2010.

Rates on 30-year fixed mortgages fell this week to the lowest level of the year and were barely shy of the record low. The mortgage finance company Freddie Mac said the average rate sank to 4.72 percent, down from 4.79 percent last week. It was just above the record of 4.71, set in December.

The average rate on a 15-year, fixed-rate mortgage hit 4.17 percent, down from 4.2 percent last week and the lowest on records dating back to 1991. Though mortgage rates are at attractive levels, the housing market has not benefited. The number of customers applying for a mortgage fell to the lowest level in 13 years last week and was down 35 percent from a month ago, according to the Mortgage Bankers Association.

That’s a sign the market is struggling without the tax credit of up to $8,000 for first-time buyers, which expired at the end of April. Freddie Mac collects mortgage rates Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.

Rates on five-year, adjustable-rate mortgages averaged 3.92 percent, down from 3.94 percent a week earlier. Rates on one-year, adjustable-rate mortgages fell to 3.91 percent, from 3.95 percent. That was the lowest average since May 2004.

From this article. Three cheers for Congress if they can get another tax credit passed.  I think that will strongly encourage potential home and condo buyers to lock in these historically low mortgage rates.  Right now, there is a lot of uncertainty in the economy as a whole, and any effort by federal, state, and local governments to improve consumer confidence will go a long way.  Other than passing another $8,000 tax credit, do you think there are any other programs that could be developed to aid the home buyer?

For most men, staying groomed can be a real challenge. We generally hate shaving, and we hate having to fork over $30 for a haircut from an 80 year old barber who still speaks in the language of the old country. Thankfully, those of us in the Greater Boston area no longer have to worry about such problems anymore. For a one-time membership fee, we can join an all-in-one grooming Mecca located in the heart of Allston. The 379 Club provides the very finest in personal grooming services, including modern barbering, hand and foot detail, therapeutic massage and more. All in a luxurious and relaxed atmosphere with minimal waiting times. With Bronze, Silver, Platinum, and Gold memberships being offered, you can experience the 379’s unparalleled services, from unlimited haircuts and free drinks to personal chauffeurs and weekly hot stone massages.

Contact Omar, Shay, or Derek for more detailed membership pricing

Live Proper

This new apartment community is a short distance to everything the city has to offer. Public transportation, award-winning restaurants, and shopping are just a few short minutes away.  Located less than one block from the new Silver line and within a few blocks of Restaurant Row, this new community is situated in the heart of Boston’s thriving and vibrant South End neighborhood.

Imagine yourself in a newly constructed loft. Your new apartment will feature high ceilings, polished concrete floors and still have all the modern conveniences of city living. Every apartment has a fully applianced kitchen with a dishwasher, garbage disposal and plenty of cabinet and counter space.  The floor plans are large and open, but still each room has plenty of privacy. With many of the units spread out over 2 or 3 floors, this building offers the perfect balance between a completely open layout and a more traditional apartment.

1 Bedrooms starting at $1850
2 Bedrooms starting at $2300
3 Bedrooms starting at $3000

Contact a Proper Agent for immediate showings.

Eating away at the American Dream

To Rent or to Buy?  That is the question.

Here is a look at that timeless question from a different perspective, from this article in today’s Wall Street Journal, written by author and scholar Richard Florida:

Several generations of Americans have seen homeownership as a birthright and a necessity. We take it for granted that owning your home is a good thing. It goes along with higher incomes; it causes people to be more diligent, hard-working and productive; it leads to stable families, stable communities, and higher levels of happiness and well-being.

Homeownership certainly contributed significantly to the golden era of American prosperity that began after World War II and continued into the 1990s, fueling demand for the cars and appliances that were rolling off assembly lines. But the foundation of our economy no longer lies in manufacturing, which created stable populations of workers committed to their jobs and communities for life. Today’s idea-driven economy requires a more mobile work force that can seize opportunities wherever and whenever they arise.

Owning a home may actually be a drawback given the economic flexibility required to power long-lasting recovery. My colleagues and I tracked homeownership levels across U.S. cities and regions to see how they correlate to other measurable demographic and economic factors. As we expected, the rates of homeownership are greatest where housing prices are lowest. But cities with high levels of homeownership—in the range of 75%, like Detroit, St. Louis and Pittsburgh—had on average considerably lower levels of economic activity and much lower wages and incomes. Far too many people in economically distressed communities are trapped in homes they can’t sell, unable to move on to new centers of opportunity…

The rate of homeownership in America is already starting to fall back on its own. From a high of almost 70% during the bubble years, homeownership has fallen to roughly 67%; slightly less than 39% of Americans between ages 18 and 35 own their own home, down from 43% in 2005. The Urban Land Institute projects that homeownership may fall to 62% over the next decade or two.

I’m not saying that Americans should give up on homeownership. Those who plan to stay in one place, who have secure jobs, and who can afford to should still buy homes. We need only tilt the balance, reducing the current homeownership rate from our current rate of just over two-thirds to perhaps 55% or 60%, comparable to that of the most economically vibrant regions. It’s in our economic interest to help make that happen.

What do you think?  To Rent or to Buy?  For a complimentary professional real estate consultation, please contact Proper Realty Group 7 days a week.