Five Biggest Real Estate Myths

Barbara Corcoran, frequent real estate contributor to NBC, presented the 5 biggest real estate myths in this market.

Watch the clip on msnbc.com.

For more information on the Boston real estate market, go to Gibson Sotheby's International Realty, Boston's real estate experts.

Boston real estate firm gives back to the community

In a year that has seen historic stock market volatility, one local firm has chosen to help their neighbors in need. Gibson Sotheby’s International Realty, a luxury Boston real estate company, has decided to donate funds to several local charities in lieu of their annual client appreciation holiday party. “We are very aware of the needs that aren’t being met around the city. It is important for us to help our neighbors by donating our time, money and support,” says John Ranco, Sales Director.

Several of Boston’s community organizations will receive Gibson Sotheby’s support, such as The Home for Little Wanderers, Project Place and Home Start. The firm’s individual offices have also chosen to contribute to additional charities within their communities, including The Women’s Lunch Place, Hale Barnard House, The Boston Home, Kids Can Cook, Youth Service Providers Network, Animal Rescue League, Jane Doe Inc., New England Shelter for Homeless Veterans, Townie Santa, and the Warren Prescott School.

Larry Rideout, CEO and owner of Gibson Sotheby’s International Realty, says he has seen a tremendous amount of enthusiasm coming from the agents. Rideout and his family recently volunteered at the Boston Rescue Mission. “I am so proud of what we are doing. My colleagues and I care about our neighbors and want to do something to help them in a very real way. This is simply inspiring.”

For more information on the Boston real estate market, go to Gibson Sotheby's International Realty, Boston's real estate experts.

Spotlight on the Boston real estate market

By Joe Wolvek

No, the national news is not good and year over year number of sales citywide is off. However, a good deal of real estate business in the core downtown Boston markets is getting done and I expect it to continue to be so. The number of sales is lower in those markets, but not as much as citywide, certainly far from the situation across the state and the nation. Perhaps counter intuitively, median price and $ per square foot continue to be high due to tightness of supply.

While prices and sales volume continue to drop in New York, driven mostly by the wave of layoffs in the financial services industry, here in Boston, while we certainly won't be immune from layoffs, our jobs market and economy are much more varied, which should insulate us from a good deal of the pain.

One of the reasons that we're going through this is obviously the great wave of foreclosures and bad debt out there. While there are not many foreclosures in the downtown Boston markets, the rising tide of foreclosures nationally caused in large part by the upward adjustment of ARM rates is obviously tightening credit, making mortgages harder to get.

The bad news is that this barring some major restructuring of this debt, this wave could continue through a good deal of 2009. There's certainly plenty to be concerned about in the economy right now. The good news is that after that, the upwards adjustment of the ARMS that are causing this should be over, and we will start to come out of this. There may also be more help for homeowners in trouble via programs that will lower their rates. Additionally, interest rates for new sales and refis have just become even more favorable (as of 12-2 5.5%-5.7% for a qualified borrower on a 30 year fixed--call your lender now!) and could go down further to historically low levels. And there's certainly hope that the huge stimulus package that will probably go into effect in January will help, in addition to the Fed lowering other rates and taking additional action to loosen up the credit markets.

In comparing the third quarter this year with last year, as I was for the second quarter, I continue to be a little bit surprised to tell you that we did well in the central downtown markets. Most of the year-over-year comparisons such as $/SF, numbers of units sold, etc., are not bad, and some are even quite favorable. As I said, we shall see what happens...

As far as Boston is concerned, our jobs outlook seems good relative to the rest of the country. Our level of supply is currently relatively tight to moderate depending upon the neighborhood. We are protected from overbuilding and oversupply because of the lack of buildable land. One of the big problems in places like Florida, Arizona, and Nevada, was that there was a huge availability of inexpensive land for developers to overbuild upon.

Due to the season, I would expect that it will continue to slow up a bit. Also, here in Boston, in addition to consumer caution, I think adverse effects will have more to do with the lack of availability of credit than anything else. The tightening supply of mortgage money has definitely continued to effect certain transactions. The rules continue to get stricter with regard to both borrowers (credit rating, income vs. debt, etc.) and properties (condo owner occupancy, reserves, presence of a commercial entity in the building, appraisal).

The market does not behave as a whole, in unison. It is divided into geographic and financial segments, which are all behaving differently. Both buyers and sellers should be aware of the market conditions in the particular segment they're involved with. Working with an experienced and knowledgeable agent can give you a big edge. Now, more than ever, it is important for buyers to get experienced help in executing a positive and comprehensive plan in order to make the right decisions, in sorting out the worthwhile properties, and getting help in negotiation and the transaction itself. And now more than ever, it is necessary for sellers to take advantage of the extensive marketing exposure, as well as market positioning, and negotiating experience that I bring to the table. I've been doing this for 15 years. If you would like more detailed info, or help purchasing or selling your property, please contact me. I stand ready to help you in either searching for and purchasing property, or marketing and selling your property.

For more information on the market, go to Joe Wolvek’s website.

For more information on the Boston real estate market, go to Gibson Sotheby's International Realty, Boston's real estate experts.

Fewer foreclosure petitions in Massachusetts for November

According to the Warren Group, there have been much fewer petitions for foreclosures in the state of Massachusetts in November. The numbers, which spiked in October, have eased off this month. That is welcome information for the real estate industry. Read the full article on Boston.com.

Also, there has been an increase in activity in real estate sales in the city since the presidential election. “Buyers are pulling the trigger if they see value,” says Kerry Dowlin. “We are definitely seeing some very promising movement at all price ranges.” Dowlin and her colleague, Danielle Bing, just listed three renovated condominiums with modern finishes in Dorchester’s Boston Street neighborhood. The development by New Boston Ventures has been very well received. “We had a tremendous turn-out at the launch event – showing that there is demand for quality homes at the right price.”

For more information on the Boston real estate market, go to Gibson Sotheby's International Realty, Boston's real estate experts.

Prepping your credit for a future purchase

A recent article on MarketWatch.com offers tips on preparing your credit score for next year’s real estate purchase, including:

- Check your credit report. Find out if there have been changes to your account limits, and make sure there aren't any errors. Look for any negatives on your report -- many negative items should be removed after seven or ten years.

- Don't get close to card limits. About 30% of your FICO is based on the ratio of the amount that is owed on active cards to your available credit. But utilization on individual cards is important too; getting close to the limit on one card will also reflect negatively on your score. Pay down balances as much as possible.

- Keep accounts active. Accounts get closed when there hasn't been activity on them for a while. Make small purchases on cards a couple of times a year -- then pay them off right away -- to keep accounts active and your available credit up.

- Pay bills on time. This should an easy one, but could prove challenging for people who could lose their jobs in the months ahead. Be proactive, and contact the credit-card company as soon as possible if you're having problems paying your bill. Payment history counts for about 35% of your credit score.

- Don't apply for new cards. Store cards are tempting when they offer discounts at the register, but don't bite. Applying for that card will have a negative effect on your score in the short term.

Read the full article on MarketWatch.com.

For more information on the Boston real estate market, go to Gibson Sotheby's International Realty, Boston's real estate experts.

What does $500,000 buy in other U.S. markets?

A recent article on Business Week’s Website indicates that New York, San Francisco and Boston have sustained their home values through these challenging economic times. The rest of the nation is facing drops in real estate values.

The article also offered insight into what $500,000 can buy in different home markets around the country. Our city was represented by a property on Commonwealth Avenue, marketed by Julie Harrison of Gibson Sotheby’s International Realty. This lovely home can be viewed as an MLS listing.

Source: BusinessWeek.com and MLSpin

The Changing Face of South Boston

Once known for being an insular community of born-and-raised Southie residents, South Boston has changed. The demographic landscape now includes a growing number of young professionals, looking for proximity to downtown and more favorable pricing than the South End. Renovated condominiums in multi-family buildings offer larger space with lots of character.

Don Minchello, a South Boston Specialist at Gibson Sotheby’s International Realty, has seen buyers coming in from New York, New Hampshire, Illinois and Pennsylvania in recent months. “South Boston is a great community and many of the people who eventually buy here start their search in other parts of Boston – the South End, Back Bay and even Cambridge. Their dollars buy larger homes than in those other neighborhoods. South Boston is still an excellent value.”

For more information on the Boston real estate market, go to Gibson Sotheby's International Realty, Boston's real estate experts.

Firms Relocate to Boston

For the second year in a row, Gibson Sotheby’s International Realty was honored by Who’s Who in Luxury Real Estate for the most outbound referrals. The Who’s Who in Luxury Real Estate network includes 1,912 of the world’s finest real-estate companies with properties in 98 countries. Who’s Who is also the firm that hosts LuxuryRealEstate.com—one of the top ranking sites for luxury real estate searches.

In this challenging economy relocations still occur. Tarin Patrick, VP of Relocation Services for Gibson Sotheby’s says his department is remarkably busy. “We have been working on the first stages of a large group move with a large third party relocation firm for one of their clients. Employees are moving from Charlotte, North Carolina to Concord, Massachusetts and Lowell, Massachusetts. And that move is going very well.”

For more information on the Boston real estate market, go to Gibson Sotheby's International Realty, Boston's real estate experts.

See an article in Forbes for which Tarin Patrick was quoted about high-end home sales.

Gibson Sotheby’s International Realty Expands into Charlestown

Despite the recent concerns about the economy, Gibson Sotheby’s International Realty continues to grow and extend their reach throughout the Greater Boston area. The firm recently announced that they have acquired Grancey & Company Real Estate, and will remain in Grancey’s spectacular location in Charlestown’s Thompson Square. Through Gibson Sotheby’s International Realty’s recent expansion, they are now able to offer more opportunities and enhanced service to areas north of Boston. “We’ve strategically located our offices to offer the finest service in and around Boston. Charlestown is an area we’ve had our eye on for some time now. We are very excited about what this means for our company and our clients” said Larry Rideout, CEO and Owner of Gibson Sotheby’s International Realty.

When asked about the timing of this expansion, Rideout was confident in the strength of the Boston real estate market. “We are the only firm in the top seven in the state of Massachusetts that is doing better than last year. We are very confident in our ability to help our clients succeed in this market. We offer a full portfolio of rentals, sales and relocation services. People are looking for advice, experience and full service. Our agents give them what they need.”

Founded in 1989, Grancey & Company Real Estate has serviced clients in Charlestown’s historic neighborhoods. Situated at the head of Boston's vibrant inner harbor, and across the Charles River from Beacon Hill and Back Bay, Charlestown borders Cambridge. Gibson Sotheby’s, founded in Boston’s South End as a boutique agency, has become a regional powerhouse – with its firm ranking boosted to #7 in the state of Massachusetts (source: MLS).

For more information on the Boston real estate market, go to Gibson Sotheby's International Realty, Boston's real estate experts.

The Red Sox aren’t the only winners in the Fenway

A recent market study suggests that Boston’s Fenway neighborhood is showing market momentum, with a whopping 12.3% increase in average sales price to $359,156. A meager 2.71 month supply of inventory, even lower than the South End, is driving favorable prices for homeowners within that area. The average days on market are a shocking 86 – by comparison, the South End is performing well at 122!

The Fenway neighborhood, most well-known for being the home of the Boston Red Sox, is also the location of the Museum of Fine Art, the Isabella Stewart Gardner Museum, as well as several notable universities and colleges.

For more information on the Boston real estate market, go to Gibson Sotheby's International Realty, Boston's real estate experts.

Source: MLS.

Boston’s hot neighborhoods still going strong

A study on the housing inventory in the neighborhoods in and around Boston is showing an overall reduction in inventory and some increases in median and average sale prices. The big winners were the South End and Back Bay. Along with the South End’s 3.21 month supply and the Back Bay’s 5.77 month supply, each area has also enjoyed an increase in average sale price. The South End increased 5.4% to $642,969 and Back Bay jumped 7.6% to $932,316.

Source: MLS.

For more information on the Boston real estate market, go to Gibson Sotheby's International Realty, Boston's real estate experts.

Survey Findings Contradict Media Perceptions in the Marketplace

New York, N.Y. — Despite media reports to the contrary, real estate is still considered a sound investment and affluent consumers are confident both in the current housing market and that the value of their home has remained constant, according to a consumer research study undertaken by Architectural Digest with Sotheby's International Realty Affiliates LLC. In the newly commissioned survey, "Seeking an Extraordinary Lifestyle," 85% of respondents agreed with the statement, "I think real estate continues to be one of the better investments a person can make." The study further revealed:

• 72% of respondents believe their primary home value has remained constant or increased in value over the last 12 months (46% remained constant; 26% increased).


• Nearly two-thirds of respondents report that current conditions have "no effect" on their likelihood to sell their primary home (63%).


• In the coming year, 79% believe the value of their primary home will continue to remain constant or increase (55% remain constant; 24% will increase).


• In the next year, more than half (54%) of the million-dollar homeowners plan to buy, sell, build or invest in a new home.


• 69% of million-dollar homeowners agree that now is a good time to add to one's real estate holdings.


• 71% agree, "Over time, nothing beats real estate for building one's personal wealth."

The respondents feel that the media plays a role in the perception of the current real estate market conditions:

• Half (50%) of respondents think the media exaggerates conditions to make the market seem worse than it is.

"This study confirms that even in a downturn economy, our readers are what we call 'recession- proof'," said Giulio Capua, vice president and publisher of Architectural Digest. "They continue to spend money on real estate and other luxury goods and services."

According to Michael R. Good, president and chief executive officer, Sotheby's International Realty Affiliates LLC, the study proves that real estate continues to be seen as a valuable investment opportunity, especially among consumers in the luxury market.

"This study validates the assertion that real estate is one of the best long-term investments a person can make, regardless of current market conditions. Affluent consumers know that real estate plays a key role in their long-term strategy to increase personal wealth," said Good. "And among those consumers seeking to add to their real estate portfolio, the top criteria for choosing a property are location, price, amenities and home features."

Research Methodology

Beta Research Corporation conducted a geo-specific mail survey to 3,500 Architectural Digest subscribers with a household income of $100,000+ and a home valued at $1,000,000+ on behalf of Condé Nast Publications in the following designated market areas: New York, Los Angeles, Chicago, San Francisco/Oakland/San Jose, Boston, Atlanta, Miami/Ft. Lauderdale, San Diego, Denver and Detroit. The survey was conducted between February 19 and March 14, 2008. There were 510 respondents.

About Architectural Digest

Architectural Digest is the world's definitive design magazine, reaching an audience of over 4 million readers each month. The magazine features the work of world-class authors and photographers and regularly presents a "first look" at the homes of leaders in the fields of entertainment, fashion, business, society and the arts. For more information, visit www.architecturaldigest.com

Big Dig Ends, New Hope Begins

A recent New York Times article proposes that the completion of the Big Dig will encourage more people to move to Boston. With the old green central artery gone and new green space in its wake, there is renewed interest in coming back to the city.

We've seen a number of Baby Boomers move to Boston from the burbs in the last five to ten years. With the spring market in full swing and the interest rates at a remarkable low, buyers are showing up to open houses in droves.

http://www.nytimes.com/2008/02/24/us/24dig.html?_r=1&hp&oref=slogin

No Savings in FSBOs

The December 24^th edition of Banker and Tradesman features an interesting page-one article on the FSBO market. The percentage of For Sale By Owner properties in Massachusetts has remained steady over the last 2-3 years. That might be surprising given the growing number of companies that offer limited marketing for FSBOs and the amount of shared information online.

The Massachusetts Association of Realtors believes it’s found the “fly in the ointment.” Though homeowners save on the typical 5-7% commission, there is a dramatic difference in sales price: in a MAR 2006 survey, the median sale price for FSBOs was $312,000, compared to agent-assisted sales at $385,000. The math shows a net gain for homeowner’s using agents:

$385,000 – median agent-assisted sale

- $19,250 – agent commission (5%)

$365,750

After the commission is paid, the agent-assisted homeowner got $53,750 more than the median FSBO sale!

What are the reasons for the discrepancy? The Banker and Tradesman article points to a number of tools that agents have: greater marketing exposure, proper pricing, expertise in negotiations and proper disclosures. The article also sites that these tools are more important in a market such as this.

Source: http://www.bankerandtradesman.com/pub/5_316/residential/198256-1.html

For more information, email us at gibsonSIR@sothebysrealty.com or visit our website at http://www.gibsonsothebysrealty.com/ .

Gibson Sotheby’s Celebrates Its First Year Anniversary

Local firm finds remarkable success in global affiliation

“We never dreamed that we could achieve this kind of success in our first year. It is like an early holiday gift,” said Larry Rideout. He and his partners, Paul McGann and Michael Hansen, acquired Boston’s largest independent real estate company in November of 2006 and brought it into the Sotheby’s International Realty network one month later. “Sotheby’s international reach and high standards were just what Boston homeowners were looking for and they have welcomed us into their homes in the most remarkable way.”

In the months following that landmark announcement last December, the partners absorbed a Westwood office to reach out to suburban homeowner’s and then merged with Back Bay’s luxury powerhouse, Dickerson Real Estate. Then, the most successful Waterfront office joined them, followed by Lois R. Kunian Real Estate, a 27 year veteran of the business. They further enhanced their portfolio of services by building a relocation division that has now placed more than 400 referrals around the world, winning an award in October at the Who’s Who in Luxury Real Estate Fall Conference in Vancouver. Gibson Sotheby's was one of only 8 award winners within the network of over 450 luxury real estate firms.

“While many other companies have been downsizing, we’ve been growing,” said Owner, Paul McGann. “After acquiring the top company in the city and bringing in the centuries old Sotheby’s name, other agencies began calling us. We completed our 3 year plan in the first 10 months.” Gibson Sotheby’s International Realty more than doubled their agent base in first year, upgraded their offices and opened a new space at 69 Newbury Street. They exceeded last year’s sales volume by the end of August and raised sales by more than 36% over last year. Since January, their firm’s ranking has been boosted from number 16 to number 10 in the state (source: MLS). Their Rental Division, the largest in the city, was up 33% over last year. So what about the down market? “We haven’t seen it,” said Hansen. “We’ve been helping more people purchase homes this year than I can remember. We’ve seen the real estate market slow down a bit around the country. But, in and around Boston, homes are in high demand.”

The company has also participated in several events around the world to see how they might find new ways to service their clientele. “In the last year, we’ve been to New York, Connecticut, Scottsdale, Colorado, California, Grand Cayman, Canada, England…” said John Ranco, Gibson Sotheby’s Sales Manager. “In fact, we just got back from Las Vegas for the National Association of Realtors Convention. Last week I had the opportunity to visit our office in London & toured the Auction House at New Bond Street. Each trip is an opportunity to develop as individuals and as a company, knowing that local homeowners benefit from our professional growth and our personal investment in our service.“ Ranco notes that Sotheby’s global ties allow his Boston firm to reach out to the influx of international investors who are taking advantage of the powerful Euro.

The growth plan for Gibson Sotheby’s International Realty in 2008 is under wraps. “We have some very exciting plans in the works,” said Rideout. “Don’t be surprised if we complete our 5 year plan in the next 12 months.”

For more information, go to http://www.gibsonsothebysrealty.com/ or call 617.426.6900.

Contrary to News Reports, Boston Luxury Market Remains Strong

By Larry Rideout

Recent news articles are celebrating Boston’s thriving luxury real estate market (“Hub’s Condo Market Enjoys Life of Luxury” in Banker and Tradesman and “Finding a windfall in their walls” in the Boston Globe). This may seem inconsistent with the “Chicken Little” syndrome in the media for the last 18 months. You might wonder how the sky could be falling while the luxury market is booming. There are a few reasons for this phenomenon:

1. The sky isn’t falling… in Boston – While much of the nation has seen a major market correction, Boston has remained strong. My real estate colleagues in beleaguered markets like Las Vegas and Miami have battled falling prices and rising inventory levels. By contrast, Boston and Manhattan have experienced a relatively small correction. For the months of January-October, there was a 27% increase over 2006 in homes sold for $1 million or more. There was a 17% increase in homes sold at all price points. (Source: Boston’s MLS for Back Bay, Bay Village, Beacon Hill, Leather District, Midtown, North End, South End, Waterfront).

2. Boston was less affected by the recent drama in the mortgage industry – The national media rallied around horror stories of 13% mortgage interest rates and a shocking increase in foreclosures. However, the most dramatic hikes and salacious stories took place in California; a state that has been historically less stable than the New England states.

3. The luxury buyer is unaffected by recent changes in the mortgage industry – Many luxury buyers do not utilize loans to purchase homes. Some are cash buyers or are utilizing the 1031 exchange process.

4. The falling dollar makes this market more attractive to foreign investors – One UK pound buys $2 and one Euro buys $1.50. This means a higher value of investment for foreign buyers. Local real estate companies with global ties are seeing a rise in the number of international buyers for properties in major metro markets, like Boston.

The good news for Boston homeowners is that our properties continue to be desirable to buyers and investors, alike. Invest in Boston with confidence – after all, the city has earned it!

_________

Larry Rideout is the CEO and Owner of Gibson Sotheby’s International Realty in Boston. Mr. Rideout has more than 20 years of experience in real estate, including 15 years with the nation’s largest real estate firm, as Senior Vice President of Realogy. Contact him at Larry.Rideout@SothebysRealty.com or his website http://www.gibsonsothebysrealty.com/ .