SalemNews.com, Salem, MA

November 14, 2012

Moving on up

Brisk sales, stable prices means realistic home market

BY ETHAN FORMAN STAFF WRITER
The Salem News

---- — SALEM — Salem native Scott Garabedian loves his home at 3 Lincoln Road, a cozy four-bedroom Colonial in which he and his wife raised a family.

“This wasn’t a house, this was our home,” said Garabedian, whose home sits in a tight-knit neighborhood off Loring Avenue just up the road from Pickman Park.

Garabedian’s home was able to sell relatively quickly in a market that some North Shore real estate brokers describe as having both buyers and sellers with realistic expectations. Those expectations are leading to homes selling at a faster pace than a few years ago, but prices still have not shot through the roof.

With his youngest son in college, Garabedian and his wife became empty nesters, but that did not trigger the thought of moving. It was when Garabedian looked into refinancing that he saw how low interest rates have become.

The thought occurred to him that the downsizing move he and his wife intended to make to a townhouse condominium in four or five years was one best made now. When he bought his home 24 years ago, his mortgage was 11.9 percent. He has refinanced that rate over the years, but his new mortgage on his new townhouse is 2.6 percent.

“‘Why don’t we throw it on now and see what it is,’” Garabedian said he told his wife.

Garabedian felt the timing of the sale was off, given it was after Labor Day and his house was perfect for a family who might not want to move after the school year began.

“It really took less than 30 days to get an offer and get moving,” Garabedian said.

The home was under agreement in about two weeks, said Julianna Tache, an owner of Tache Real Estate in Salem, which listed the Garabedians’ home.

The offer of $330,000 was in the middle of the couple’s dream offer and the rock-bottom price they would accept.

The Massachusetts Association of Realtors said late last month that September home sales, the latest figures available, were up for the 15th straight month, compared with the same month last year. Condominium sales also rose in September.

Year-to-date, home sales through September are up on the North Shore compared with the same period last year, according to The Warren Group. The sales figures also show modest declines in price compared with last year.

Realtors also reported a 21 percent drop in inventory statewide, with 7.3 months of supply in September, compared with 10.8 months of supply in September 2011.

Stable or declining prices, fewer homes to sell, low interest rates, and homes that are priced right may be fueling this uptick up in sales. With President Barack Obama winning a second term last week, high-end buyers also face the possible expiration of a capital gains tax cut and an increase in capital gains for those who are wealthy, Tache said. Economic uncertainty was a factor in the Garabedians’ decision to make the leap early.

“Not knowing where the economy would go one way or the other depending upon the presidential election, we said this was a good time,” Garabedian said. “Maybe better now than a year from now.”

“We are in a normal market,” said Paul Rallo, a broker with Keller Williams in Beverly. “People forget what a normal market was.”

With sellers’ expectations of what they can get for their homes more realistic and buyers doing their homework, homes are selling quickly.

“People are starting to pay attention, and if you price it right, it will sell,” Rallo said.

In May, Rallo put a home under agreement at 19 Wadsworth St. in Danvers, a residential street off Hobart Street, in just five days. The asking price was $269,900, and the agreed-upon price was $264,000.

On Aug. 7, Rallo listed a home at 11 Wellesley Road in Danvers at $329,900, and six days later, it went under agreement at $327,000. On. Aug. 15, Rallo listed a home at 17 Puritan Road in Beverly at $425,000, and nine days later, it went under agreement at $422,000. A home that is priced right will fetch a price that is close to the asking price, Rallo said.

Interest rates, rather than capital gains tax rate increases, are helping fuel sales, Rallo said, but he cautions that these rates are not going to stay low forever. For those looking to buy a home, whether they are first-time homebuyers or those looking to downsize, now may be the time to “step up to the plate” before prices and rates start to rise, Rallo said.

On Nov. 8, Tache said she went to show a property, and 30 people showed up. She now has seven offers. The lack of homes may be to blame, and that has real estate agents marketing themselves heavily.

“The thing right now is we are out looking for properties,” Tache said.

Jason Parisella, president of the North Shore Association of Realtors and a broker with Keller Williams in Beverly, said that six months ago, brokers were saying that it appeared homes were selling more quickly, but it took time for those anecdotes to be reflected in the statistics. While the number of homes sold has gone up, prices remain unchanged, in part because of the number of short sales and foreclosures that have kept prices in check.

Parisella said sellers have to be realistic in what they think their homes will fetch.

“Sometimes it takes years for the seller to realize they are not going to get the price” he would have gotten at the height of the market. Parisella said he recently sold a home in Ipswich that attracted three offers and sold above the asking. Homes priced under $500,000 are selling well, as buyers are beginning to realize the low interest rates and reasonable prices are not going to last forever.

“It’s a very good time to buy,” Parisella said.

People may be trying to time the market before jumping in, but the only real way to know when the market has hit bottom is when prices rise.

“The positive thing is you definitely will get your house sold,” Parisella said.

The Garabedians are staying in Salem, moving to The Village at Vinnin Square, a quarter-mile away from their old home.

“We got that for the price we wanted, so we had motivated sellers and motivated buyers in this market, and I think people feel pretty good about Salem,” Garabedian said.

Staff writer Ethan Forman can be reached at 978-338-2673, by email at eforman@salemnews.com or on Twitter at @DanverSalemNews.