The Berkshires Aren't Boston
The Berkshires are not Boston. Thank goodness for that! When Governor Baker recently banned all non-essential travel on January 27th in response to the dire warnings from the national weather service of the winter storm "Juno" (when did they start giving names to snow events?), he did so for the entire state of Massachusetts. What he didn't know concerning The Berkshires is that Boston and most of the eastern half of the state are a different world apart from The Berkshires. We love it that way too.
Here is what Boston is famous for among other things: traffic congestion, The Big Dig, Logan International Airport, crowds, an antiquated public transit system and lots of colleges. The one thing we can ALL be proud of about Boston is really located in Foxborough, our Patriots football team!
Here's what The Berkshires are famous for: gorgeous scenery, music, dance, art, theater, boating, skiing, hiking, golf, tennis, biking, ease of access and ease of getting around (whether walking or driving, great farm to table fresh local foods, four colleges, and essentially a friendly, safe, healthy and clean environment. The exception to the rule of low traffic is getting out of Tanglewood after a James Taylor or Yo Yo MA concert. We also get around just fine regardless of the amount of snow or rain and we are spared the extremes from storms that can rip through the coastal areas of our state. No sink holes here since we sit on solid rock, not sand like Florida.
I am constantly amazed and puzzled by all the people who would choose a congested, noisy pressured city life over a country and small town life such as we enjoy here in the Berkshires. Williamstown MA, home of Williams College, has just one traffic light and many Berkshire county towns have no traffic lights at all.
High air quality, low pollution, great schools, solid family life, social and cultural life are all tops here in The Berkshires. While a big city offers higher paying jobs it also requires a higher cost of living overall. Some folks choose to live in suburbs outside of Boston and spend an hour or more a day commuting by car or public transit. My commute is 8 minutes on average and usually I don't even have to stop at the one sensor activated light.
Everything one needs is right here in Williamstown from a great hardware store to an independent movie theater, to college events, to a wide variety of gourmet restaurants. We have a Dunkin' Donuts Shoppe and a Subway Sandwich franchise for fast food lovers.
Want to enjoy the benefits of living in The Berkshires but fearful of city withdrawal? No problem, hop on a bus, train or in your car and in a matter of 3 hours be in downtown Boston or NYC. Spend four hours traveling to get to Montreal, Canada. I know once you've moved here, if you do make the trek to the city, you will be all too eager to get home again and unwind.
What intrigues me is that city dwellers will purchase a country home here in the Berkshires just as soon as they can afford one but we full time residents get to enjoy our "second home" as our first home all the time.
Life is Good in The Berkshires, really good but please don't tell too many people about it because guess what, we really like it just the way it is.
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How will your Berkshire property value fare in 2015 and beyond?
Berkshire property valuation is a daily task of Berkshire real estate agents. The Berkshire home seller first wants to know "how much is my property worth"? And that brings me to one of the most common laws of physics.
Newton's law of motion states that a body in motion tends to remain in motion unless acted upon by another force e.g. gravity, friction, etc.
This same rule applies to the value of Berkshire real estate. Rising values, a state most sellers had come to more or less "accept" as a given in real estate through 2007, sometimes rising faster and sometimes slower, gave way suddenly to massive systemic reversal.
My own real estate career began in 1975 and from that time until the early 2000s we could pretty much count on an average rate of appreciation here in the Berkshires over the years of around 5 percent. What accounted for this reliable pace? Inflation, the general rise in prices of goods and services in the nation's economy.
Following the horrific events of 9/11 the economy took a nosedive and the FED stepped in with historically low interest rates which naturally are favorable to borrowing money which is what feeds in large measure the real estate markets as the vast majority of buyers take out mortgages. The very low rates as well as very low down payment loans and lenient lending standards helped build momentum for a recovering economy and the dramatic rise in real estate prices that peaked in '07 in what was a classic bubble.
This happy scenario was inevitably followed by the downside of foreclosures and tumbling prices to where we are today, at roughly 35 percent off the peak in this region.
We read in the media of the real estate recovery and to be sure, parts of the country have definitely experienced some notable reversals of fortune such as San Francisco, Seattle, Portland, Manhattan, Miami, and even Boston in the Northeast.
In the Berkshires we have some forces at play that act as headwinds to a stronger recovery and which have been slowing the momentum of prices. Not only has inflation been muted as in energy for example but we still face the headwinds of falling population and declining employment, more acute in central and northern Berkshire County but the southern sector has by no means been immune.
Besides the economic and demographic headwinds which have added inventory (supply) and reduced demand there is one other really crucial element to value that is often overlooked by many sellers namely depreciation.
When demand was high, anything could and did sell simply because there were more buyers than homes. Today the opposite is true; inventory far exceeds the demand for housing so unless a property stands above the competition its chances of selling are far less favorable.
How does a property excel? Obviously location is vital however even that can be hindered if the seller has lived in the home any length of time without maintaining and updating the property. Dated properties are much less attractive to young buyers.
Buyers today have so many choices and will naturally choose an updated home when all else is equal. Updates desired include kitchens, baths, updated heating systems, energy saving appliances and construction, homes in "move in now" condition.
Tired, outdated, and out of style homes have significantly lower market appeal and as such will inevitably remain longer on the market without some counterbalancing steps being taken. These would include either correcting the defects or lowering the price to be more competitive.
Unlike antique cars for example which derive their increasing value with time and scarcity, the older a home becomes the more it depreciates in value. With renovations and updating some of the impact of natural depreciation can be offset but of course that also involves an investment of more time and expense to the seller.
Sellers of anything but new homes need to heed the advice of their real estate agents who are qualified to price a "used home". These sellers may have loved and enjoyed the home for years and have difficulty separating themselves emotionally when it comes to pricing. Buyers don't have the emotional attachment. Just like pricing cars on a used car lot, it is essential that the home be priced relative to other homes that have recently sold and which offered similar age, qualities and features.
For 2015 and the foreseeable future it does not appear likely that inflation will return, that demand will outpace supply or that employment will return to the area in significant numbers. As such any home that is 4,7,15, 30+ years old cannot by the law of economics increase in value without offsetting repairs and substantial updating.
If you want to fly, there is no sense in ignoring the law of gravity and if you want to buy or sell real estate, best to keep the law of real estate market value equally in mind.
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Be A Contrarian
Following "conventional thinking" definitely has its merits. Knowing others have gone before you is comforting and therefore they can't ALL be wrong. Right? Not necessarily. In fact once the crowd hops onto a trend in the stock market, that is frequently a sign of a top in that market and thus those who jumped late on the band wagon will be the biggest losers.
Do you remember 2005, 2006 or even 2007? Real estate was everyone's darling and buyers were piling on top of each other, putting in competing bids and selling prices were often over listing prices particularly in the really hot markets.
Those who jumped into real estate in those years have found the rug and the floor pulled out from under them and if they had to sell, significant losses have often been the result. Values fell 30 percent from the very peak and anyone with less than that in equity (over an mortgage they may have taken to purchase) has had their equity wiped out. Not a happy condition. We have all read the stories of the sub-prime lending that was rampant and home buyers who bought with such mortgages lost their equity and the lenders also took a loss. However the buyers typically had virtually no dollar investment to begin with.
So, now the majority of buyers are holding back. What is the Contrarian approach in this market? That should be clear. Taking a Contrarian approach now could prove to be the very best opportunity to purchase a home we may see for years to come.
With steady economic indicators showing improvement in the employment numbers and hints of inflation in some parts of the economy (food yes, fuel no) it is pretty widely accepted that the Fed will begin raising rates this year and of course that means the cost of financing a home will rise.
Real estate prices have already started to rise in some markets and thus this rise in prices could trickle up to the Berkshires in due course. If you are contemplating purchasing I would think seriously about acting sooner than later so I could not only benefit by current soft housing prices but also pick up a long term mortgage at what may prove in 6-8 months to be historically low rates.
Being a Contrarian can definitely be a bit scary but often the most beneficial course of action.
Best Wishes for a Prosperous 2015
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Come Home to the Berkshires | Berkshire County, Mass.
Traveling the world is exciting ... and exhausting, too.
Spending vacations at the beach is fun ... but then there is the sunburn.
Skiing in Colorado is thrilling ... but when the snow melts what else to you do?
Arizona is hot and dry and sunny ALL the time ... enough said.
Florida is great for the winter months but year around? Oh my.
Home, yes, that is what the Berkshires are for. And these are the reasons why:
The Berkshires are about crisp fall days of spectacular color followed by cool fall evenings and the wonderful aroma of fallen leaves.
The Berkshires are about fresh fallen snow blanketing everything in silence and turning everything it touches into a silhouette of pure magical white.
The Berkshires are about the brittle cold of winter made perfect in front of a blazing fireplace for snuggling inside with hot chocolate or mulled cider and your favorite book.
The Berkshires are about the exuberance of spring when it finally arrives and the joy of seeing the new shoots of green breaking ground, the sounds of the first spring birds joyously returning to start new families of their own, the first night of frogs singing in the ponds, the rich aroma of spring rains...
Then our summers, hot days, swimming in our pristine lakes or under a waterfall, boating, tennis, golf, gardening, hiking and sipping iced tea in the long afternoons.
The Berkshires are about the theater and art venues so plentiful here and lacking in all those other locations. Where on earth is there so much to see and do, to hear and be engaged in that stimulated the senses and intellect?
Where else but in towns like Lenox or Stockbridge can one get from home to an extraordinary experience like Tanglewood in such ease, no traffic (except at the gate itself)?
Where else can you virtually step from your home in Great Barrington or Williamstown onto trails in minutes that take you to breathtaking views?
Where else but towns like Monterey or Sandisfield, Otis or Becket can you live right on the lake of your dreams and yet be just minutes away from fine dining, winter skiing and the theater?
Where else but in Williamstown can you take classes at the top rated college in the U.S. in the morning, [play a round of golf on one of the top rated courses in the east, attend award-winning theater in the evening following a fabulous meal including farm to table local produce and cheeses and all within a short stroll or 3-minute car trip?
Nowhere else can you find living like in the Berkshires! Isn't it time you called the Berkshires home?
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For Sale By Owner: Homes for sale in the Berkshires
WHY do I need a Berkshire real estate agent to sell my Berkshire County home?
How often have you heard these next statements. Real estate agents don't do anything that I cannot do myself. Real estate agents don't do anything but get you to sign a listing form and then forget about you. You never hear from them after you sign the paper. I can save myself loads of money buy selling my Berkshires home myself.
How many times have you heard friends and family say this when they are considering selling a Berkshires property? I am betting more times than you can count on one hand.
Selling your property online on Craig's list or through an assist to sell "for sale by owner agency" or a FSBO website for a small fee that covers putting the property in the local MLS sounds like a great bargain doesn't it?
How hard can it be? So you have made the decision now to sell it your self. Now comes the serious part. Keeping your Pittsfield Real Estate FSBO house spotless (ongoing), fielding inquiry calls, separating the "nosy lookers" from the actual "qualified buyers", arranging your schedule to show your home between picking up the kids, going work and dropping off the dog at the vet.
And if that doesn't put a damper on your enthusiasm for selling your Williamstown property yourself consider this, how good are you are negotiating, when was the last time you had your home appraised by a professional home appraiser, how many bank loan officers do you know, how much should you allow for the roof that is 11 years old and the basement that floods once a year in the spring. Can you prepare a professional counter offer when you get the initial offer.
What are the laws concerning real estate transactions in your state. What fees are you responsible for and what fees is the buyer responsible for. What disclosures are you legally responsible for providing a buyer with?How many websites will you be able to put your for sale by owner property on? How often will you be able to monitor the hits and field the inquiries from buyers on those websites? How will you attract the attention of local Real Estate Brokers, and professional Real Estate Agents so they know your home is on the market.
How much of a commission will you offer these professionals to bring buyers to your home? And if you don't offer a commission, why should they bring you a buyer?
Do you know what kinds of legal protections you need related to contracts in Masssachusetts with purchase/sale clauses. How will you know a good offer from a great one? These questions are one of the reason that more people are choosing professional real estate brokers and agents to handle their real estate needs.
In fact the number of people selling their home without the help of a real estate professional plummeted in 2009. Today's challenging marketplace favors the buyers. Buyers are taking their time and exercising extreme caution when investing in home ownership. Buyers often come with a representative who is a professional Realtor.
This professional protects the interest of the buyer and is aware of all the rules we listed above and you can bet the farm that they will cover all bases before they advise their client to make an offer. What professional is protecting your best interests?
"Selling a home is a full-time job," said National Association of Realtors® (NAR) president Vicki Cox Golder in 2010. "Unrepresented sellers often don't understand the complexity, range and timing of tasks they'll have to perform. In this competitive market, sellers need every advantage they can get."
According to the National Association of Realtor's 2009 Profile of Home Buyers and Sellers, "for-sale-by-owner" transactions dropped to a record low 11 percent, and almost half of those sellers sold their home to someone they already knew, such as a relative, friend or neighbor. These are the facts: For every 100 homes sold only 11 are sold by owner and half of those are sold to a relative.
Do you have a relative who wants to buy your home? Read no further. Sell the house to the relative who offers the best price and is bank qualified to buy.
Realtors sold 89 of the 100 homes described above because Realtors have the buyers. On the open market, today's sellers have to compete with bargain priced short sales and foreclosures as well as other homeowners who may be trying to sell their homes through professional real estate state agencies.
In addition, managing the appraisal process, inspections and buyer qualifications in a tougher credit market has become more complicated in this environment, adding to the already intricate transaction process.
Without professional assistance, sellers are faced with a marketing disadvantage. The survey revealed that more than half of unrepresented sellers did not actively market their homes to potential buyers. Those who did used yard signs, Internet listings and print newspaper ads.
Unfortunately, many unrepresented sellers don't have access to fundamental marketing services, such as a multiple listing services, and can't list their homes on these sites to reach a broader audience.
Professional insights into preparing, pricing and positioning a home for sale pay off. In 2012, a typical property without professional assistance sold for $162,000 compared with $205,000 for the typical agent-assisted property. The decline in "for-sale-by-owner" properties available indicates a growing awareness of how complicated today's real estate market is.
A Berkshires Realtor® has specific knowledge of the Berkshires market and can save consumers time and money. They can help a seller set a realistic price and ensure that the proper paperwork and various disclosures and inspections are handled correctly. Sellers will get broader market exposure and are more likely to generate competitive bids by working with a real estate professional. Sellers should always interview several real estate agents and ask as many questions as needed to ensure comfort with the agent they choose.
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