The Alewife

Realtor Reality by David Wluka

Thanks for a great year as MAR prez

As I traveled across the state this year representing you, I have been asked on occasion by local association leadership how to better get the message across as to the value of being a Realtor.

Our associations at all levels actively promote the consumer value of your Realtor status. That helps our members’ public image, but we all need to do a better job of reminding ourselves about the value…the “what’s in it for me?”

If “membership has its benefits” to paraphrase the old American Express tag line, what are those benefits for us?

In wrapping up my year as your President I would like to share with you what I have seen.

David Wluka

If not for the Realtor organization:

* We could have lost the Mortgage Interest Deduction this year, as proposed by the President’s Advisory Panel on Federal Tax Reform.

* The Small Business Health Care proposal would be stuck in limbo somewhere instead of a real possibility in Congress. It has been the Realtors®, not the Retail Merchants or the Chambers or others which have rallied for affordable comprehensive health coverage.

* Federal Banks would be competing unfairly for your clients and customers, with all the competitive advantages of the Federal discount window while putting taxpayer dollars at risk.

* We would have transfered taxes all over Massachusetts chiefly because we continue to go to the mattresses whenever a proposal surfaces in our cities and towns.

* The media would continue to try to roll over our profession and the realities of the marketplace, the hyped myth of the real estate bubble becoming a self fulfilling reality, if not for the professional interviews and statistical research we supply the media on a regular basis.

* We’d all be fighting in court over disputed commissions and the like instead of agreeing in advance to arbitration, mediation and the Code of Ethics.

Realtor Reality by David Wluka

Mass. demand at 10-year low

Sales of single-family homes and condominiums declined in Massachusetts for a sixth consecutive month in September compared to their year-ago levels, even as lower home prices and a drop in mortgage rates boosted affordability, according to data released by the Massachusetts Association of Realtors.

The slower sales pace reflects consumer cautiousness and softening demand following two years of record home sales across the state, and has led to a steady rise in the inventory of unsold homes and listing time for homes and condos in the past year, MAR reported.

David Wluka, president of the Massachusetts Association of Realtors.

In the detached single-family home market, sales fell 23.9 percent, from 4,516 homes sold in September 2005 to 3,435 this September. Last month’s sales total is the lowest September home sales volume in a decade, dating back to September 1996 when 3,388 homes were sold.

Additionally, condo sales decreased 27.8 percent in the past year, declining from a September record of 2,140 units sold last year to 1,546 this September.

The September 2006 sales volume is the third highest on record for any September in state history, topped only by the 2,140 sold last year and the 1,750 sold in September 2004.

Today’s market reflects the more relaxed, even guarded, approach adopted by many buyers who are waiting to see if prices have bottomed out.

Beware risky mortgage schemes

by David Wluka

In shopping for a mortgage, it’s important to do your homework ahead of time.

Learning the “ins-and-outs” of today’s mortgages is essential to choosing the right loan product, and a experienced Realtor can help you to understand your options as you begin the mortgage selection process. In fact, the Massachusetts Association of Realtors has two new brochures available to inform homebuyers about the risks and advantages of specialty mortgage products.

These two consumer education brochures – “Traditional Mortgages: Understanding Your Options” and “Specialty Mortgages? Risks and Rewards” – can provide you with valuable information to guide you on the selection of a mortgage.

The brochures provide details on conventional loans, such as fixed rate and adjustable rate mortgages; ways to tap into existing home equity, such as refinancing; and explanations of the more “exotic” loan programs, including interest-only mortgages, 40-year fixed-rate mortgages, negative amortization mortgages, and option payment adjustable-rate mortgages.

Realtors have the know-how to advise home buyers about the risks involved with the different types of specialty mortgages being marketed today.

More buyers these days are choosing specialty loans that are loaded with risk.

Realty Reality by David Wluka

May MAR report shows listings up 33%

Sales of detached single-family homes and condominiums declined across Massachusetts for a second consecutive month in May compared to year ago levels, as higher mortgage rates, slow income and job growth, and a record number of homes for sale this spring prompted buyers to proceed more cautiously before purchasing a home, according to a report issued today by the Massachusetts Association of Realtors.

In the detached single-family home market, sales fell 2.9 percent last month, from 4,175 homes sold in May 2005 to 4,055 this May, while condo sales slipped 1 percent in the past year, from 2,134 units sold last May to 2,113 in May 2006.  Despite the more moderate sales pace, activity in the state’s housing market remains quite strong by historic standards.

In fact, the 2,113 condos sold last month is the second highest sales volume on record for May in state history, topped only by the May 2005 sales total, while the single-family market enjoyed its eighth busiest May on record for home sales this year.

It’s unrealistic to think our strong seller’s market of the past few years could sustain itself indefinitely, especially under the current climate of rising interest rates and increased inventory levels.

While demand has softened, this is not the start of a major market correction.  We’re merely returning to what we consider to be a normal, healthy market, after a period of unprecedented home sales growth and price appreciation.

Which home repairs pay-off

[David Wluka is the 2006 President of the Massachusetts Association of Realtors and the owner of Wluka Real Estate in Sharon. This column appears on the June edition of The Alewife.]

by David Wluka

If you are interested in gaining a significant return on your home improvement costs, plan to add a bathroom or remodel your kitchen. But if you're like most people today, you may be more interested in a new home office, an entertainment center, or an in-ground swimming pool with all the accouterments of a luxury pool yard.

How can you know whether the money you spend on your home will actually improve your property’s value? And do you really care? Those are the two questions you should be able to answer before choosing which improvement projects to plan, according to our research at the Massachusetts Association of Realtors.

Research shows some home improvements are better than others in bringing a return on investment, and that some luxury additions actually can be a drag on the home's ability to sell.

Download ReCHART.pdf

An in-ground pool, for example, may be viewed by some as an asset, but families with infant children may see it as a safety problem, and seniors might shy away from the maintenance.

This $12,000-$15,000 investment will only add minimally to the value of your home, but if you are planning to stay awhile and enjoy backyard vacationing, this is still a good project for you. On the other hand, if you are planning to move in a few years and are looking for home improvement projects to smooth the sale, you might better consider adding an outdoor deck or new vinyl siding, which offers projected returns of value of 134 percent and 127 percent respectively.

Other projects which rank among the top five for adding to the resale value of your property include the remodeling of a bathroom – a $10,000-$15,000 investment – which offers a projected return of 129 percent; renovation of your kitchen – which might range from $45,000-$50,000 for a major remodeling project and upgrade in appliances to $15,000-$20,000 for smaller scale improvements – that will return from 105 to 118 percent respectively; and replacement of the roof, which typically allows homeowners to recover as much as 120-125 percent of the project’s cost.

Historically, family rooms have been a significant focal point of homes, but increasingly we spend less and less time there. As a result, recent studies have found that U.S. homeowners who add a family room recoup a more modest 85 percent of the project’s cost at the time of the home’s sale.

Other projects which show more moderate returns on investment include a sunroom addition of $30,000-$35,000; which yields a 70 percent average return locally; finishing off a basement, which typically yields an 83 percent return; and remodeling a room into a home office, which might cost upwards of $15,000 and should allow you to recoup an estimated 91 percent of the cost upon the sale of the home.

Realty Reality by David Wluka

Massachusetts homes sales released

[David Wluka is the 2006 president of the Realtors Association of Massachusetts and the owner of Wluka Realty in Sharon. His column is a regular feature of the The Alewife Real Estate Section.]

Despite predictions of a housing slump, the residential real estate market in Massachusetts experienced another year of steady growth in 2005 as total sales of detached single-family homes and condominiums set a new record and median prices rose for a 12th consecutive year, according to data issued Feb. 15, by the Massachusetts Association of Realtors.

Attractive mortgage rates, a more plentiful supply of homes for sale, and more modest price appreciation have all helped to keep demand strong amidst rising energy prices and a weak job market this past year.

Once again, the local housing market has outperformed the expectations of many.

With mortgage rates relatively stable and a larger supply of homes to choose from, it’s been a good time to be house-hunting. Market conditions have become much more favorable to buyers in the past year.

Across much of the state, the largest gains in sales activity occurred in the condominium market where sales soared to a new all-time high in 2005, climbing 16.4 percent from 19,781 units sold in 2004 to 23,026 last year. 

It’s the fourth consecutive year that condo sales have set a new annual sales volume record.  Sales of detached single-family homes were historically strong this past year as well, but slid a modest 3.2 percent statewide, from a record 50,561 closings a year ago to 48,922 in 2005. 
Notably, the 2005 sales volume for detached homes ranks as the fourth highest on record in state history.

There are signs of moderation in the market however. 

Specifically, the MAR report shows that sales of detached single-family homes fell 8.1 percent in the fourth quarter, declining from 12,171 homes sold in the final quarter of 2004 to 11,189 in the same three-month period this past year. 

It’s the largest annual quarterly decline in home sales in nearly three years, dating back to the first quarter of 2003 when sales decreased 10.6 percent from the first quarter of 2002, and marks the third consecutive quarter that home sales have fallen in the Bay State from the same quarter the prior year.

The accelerated sales pace of recent years has all but ended and we’re returning to a more normal market.

Read 'Realty Reality'

Check out David Wluka's new column in The Alewife in the Real Estate Section of the February edition that is on the streets now.

Wluka is the 2006 president of the Massachusetts Association of Realtors and owns Wluka Real Estate in Sharon.

How to choose a real estate professional

[David Wluka is the 2006 president of the Massachusetts Association of Realtors and the owner of Wluka Real Estate in Sharon.  Wluka's column will be a regular feature in The Alewife's Real Estate section.--Editor.]
by David Wluka

Choose a real estate professional with as much as care as you would a lawyer or doctor.  Friends, neighbors and co-workers are often good sources for referrals.  Try to find out as much as possible about their home buying or selling experience. 

What kind of service did they receive?  Would they choose this particular agent or real estate brokerage company again?

Upon entering the home search or sale process, be aware that you can choose to have the advice, assistance and representation of your own agent. 

As a seller, you may authorize your listing agent to cooperate with agents from other firms to help sell your property. These cooperating agents may be subagents who represent the seller or buyer agents who represent the buyer. You may obtain broader exposure for your property by authorizing a listing broker to list your home in the multiple listing service (MLS) and compensate a cooperating agent who successfully procures a buyer.

If you are a buyer you have the option of working with a seller’s agent or a buyer’s agent. The decision you make will depend upon the types of services you desire and the method of compensating the agent.

The obligations of both are stated on the Commonwealth’s agency disclosure form, which must be presented to all consumers at the first personal meeting to discuss a specific property.

Do not assume that a broker is acting on your behalf unless you have contracted with that broker to represent you.