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People are often surprised as they move out to central and western Massachusetts that there are a significant number of properties with wells.  Massachusetts is blessed with lots of rain and natural aquifers, and as a result, the cheapest way for many homes to have water is drilling a well. So there are lots of them!  While that may not be everyone's first choice, well water is often safe, free of chemicals (unlike public water), and free!  (But you do have additional equipment that needs to be maintained and replaced over time.)

Most home buyers though, have very little (usual none) experience with wells, and unfortunately, many agents do not know what they should about wells. While modern wells have been tested for today's safe water standards, many older wells have had limited - or no - testing.  Additional, home water wells can degrade over time, as the cracks in the aquifer fill with sediment.  This brief primer covers the top recommendations for home buyers who are taking the plunge and kissing their water bill goodbye! 

Transctipt of this video:

I think a lot of people who might be checking out this video will be thinking about buying a house that has well water, and they want to see whether or not that's a good idea. I think for most people it is a good idea If It's the right house for you. I don't think well water's all that much to be concerned about, but you definitely want to make sure that you have good well water. 

As you get into more rural areas and sometimes even in highly populated areas, you're going to find more wells. In my area about 20 of the houses have wells, so they are fairly common right and generally they're not a big deal, 20 of the people can't be wrong, right? The main message of this particular video is you want to, you want to make sure that it gets tested and we're going to talk about what do you need to test it, and how you need to get it tested. What you're looking for is the results of those tests and who should be doing the testing. 

It does cost for a little bit of extra money to properly test a Well Yes! But this is your household water  afterall, so you definitely want to do it. And if something is found that needs to be fixed, proper well testing is going to save you a lot of money down the road.  Make sure that you're including in those purchase offers that you're going to test that well. 

For those who haven’t met me I’m Matt Heisler, I am the broker owner of Vanderbilt properties, and I've sold many homes with Wells. So even though I'm not an attorney and a lender, I feel like I can help people make sure that they're being careful, when buying Wells properties with Wells on them. 

Why do some homes have Wells? Usually, it's because town water for that particular location is too expensive to do. Sometimes they couldn't get the city or town supply (when it was bullet) but now they can. And then you have an opportunity to hook up. But just because you have an opportunity to hook up, doesn't mean it's going to be cheap, right? So that's something that you want to price out, if that's your plan to hook up (to town water supply). So a lot of times people think it's going to be like two thousand dollars and it's like 25 -35,000. Running pipes from the street all the way up to your house, not a simple thing to do, they had to bring out heavy equipment, they got to put it below the frost line, it's expensive! So don't think that it's going to be cheap, and don't let someone tell you that hooking up is your (inexpensive) solution in case the well's not working. Most of the time wells are in place because installing a well was cheaper than hooking up to the nearest water line and that may still be true today.

First thing that anyone who does a well test that you can do as part of your whole inspection test property which you should definitely do, should definitely have a home inspection and you should definitely have a well test. I will tell you, I have a reminder at the end of this video. Most home inspectors do not specialize in wells. They usually encourage you to get an outside expert to do them. When they do test wells, sometimes they only do a limited test and you want to make sure that they're going to test all the things we're going to talk about in this video. But a specialist, someone who installs Wells and tests Wells, they're going to examine the pressure tank, they're going to examine the plumbing setup and they're also probably going to try to do what they can to check out and make sure that your pump is okay. Best way to do that is we do a pressure test that tests both the pump and it makes sure that the aquifer is flowing, freely and filling up the well, at a certain rate. These pressure tests are really exhaustive. They really push the well, they use a lot more water than a household typically used in a day. They use hundreds and hundreds of gallons and they make sure that it's coming out at this particular speed. So, it's a very serious test and the well probably has not been under this kind of, pardon the pun, pressure. Because a typical homeowner won't (push the well volume). This is the kind of pressure, you put on it if you had like a two acre lot and you were watering it with well water. 

Which is a big benefit of well water. Well water is generally free. So, you know, once you pay for the equipment and the setup, there's no water bill! It's a really big Advantage for wells. 

If that if the pump isn't isn't good, some Wells are only 75 feet deep or 100 feet deep. It's not too expensive to replace the pump there, but some Wells are 300 feet. 400 even 500 feet deep. Those pumps have to be a lot stronger. A lot bigger. They have much bigger cables that they have to run down to them. And ultimately, those pump replacements can be very expensive. You really sort of want to know how deep that well is, how old the pump is, although that information is usually very hard to get. And then make sure that you have some idea of what that might cost when it's time to replace the pump. 

Water Softeners are in place sometimes and other kinds of water filters. Usually a good Well Tech will at least go over them. Make sure that you understand them, what kind of Maintenance might be required with the softeners are pretty common to see in this area because Massachusetts has very hard water but by no means necessary. A lot of people I know have no filters and no softeners and that's probably the usual case. That's normally what you see when you go with well water in Massachusetts.

I will tell you that, well, equipment lasts a very long time, a lot of times, most of the stuff, the warranties from the pressure tanks are all rated for 10 years or more that don't require a lot of me, unlike, you know, maybe a boiler or eating equipment or any of that kind of stuff. So it's not uncommon to see that nobody has done anything at this equipment for a very long time. Sometimes it looks like it hasn't been touched in a couple of decades and that's fine and there's nothing wrong with that, but it does mean that you want to make sure that you're looking to make sure nothing is just about to break, you know, you want to make sure that you've done as much of a due diligence to make sure that the setup is okay. 

OK, again, well equipment can cost a lot of money to replace, you want to make sure that you've given it as rigorous a test as you can before buying a house. But the second thing we want to check is we want to make sure that the water is potable. Potable is a fancy water word, fancy real estate word. I mean safe to drink. For me, making sure that the water is safe to drink involves testing for arsenic which is often naturally occurring. It's not You know, it can it can just be there. And you want to sure you're not drinking it because arsenic and people don't don't mix, right? It's dangerous. 

Also want to check for radon. Massachusetts has a standard for Radon but I, I think personally it's probably a little low (too conservative). But, people can have lots of different opinions about that. There is no National Standard for radon in water, it's all set by States and you'll see that there's a lot of variants state by state. This is something they're still trying to figure out. But in Massachusetts, if there's radon in your well water, you can usually get the seller to fix it. Same with arsenic. Now, these systems are not inexpensive. $6,000 is, uh, pretty much the run rate for each one of those systems. So if you had a well that had arsenic and radon, it's a $12,000 fix there. It's not inexpensive equipment. Those things you want to make sure someone else is doing it and you're not doing it, right? That's why we're having this video. 

However,  the most common problem that we run into is that there's bacteria in the well and you don't want to be drinking that that water. You might say, well, “how come the sellers’ don't get sick?” If there's bacteria in the well and the answer is they did get sick when they first started drinking it but their bodies have gotten used to it and, uh, they don't even notice it anymore. That's the typical case and that happens quite a lot. But you're, not used to it. So we want to make sure that there's no bacteria in your well!  The good news is that is a really easy fix and it's inexpensive and any, well guy can fix it in a couple of hours. So that's not really something we worry about, but it's definitely something we want to test for 

There's also organic compounds.  Not everyone tests for organic compounds, it's a good idea to do it just as a fail safe. But truthfully in most of my area there are not a ton of places where it's likely that the aquifer has organic compounds.   Organic compounds are usually, where people that had factories from a long time ago, were dumping chemicals into the ground. Some of them may have leaked, into  the aquifer, that's not common, in my area, but it could be common in your area. So, depending on how common that is, you want to make sure that you're checking or not checking for those kinds of things, they do lots of other tests on well water where you submit it to a lab. Those tests are inexpensive. So they just sort of include them.  I I'm not going to go over all of them here, they're not usually things that we fix. And it doesn't make your water any less potable or, drinkable. But without a doubt, when buying a house, you want to make sure you've got clean safe water for drinking, cooking, and showering in pools. This is the way that you check that, right? You make sure the equipment's good, you make sure that the water's safe and now you're good to go. In fact you're gonna have some of the cleanest water you can get! 

 I will say as I close out this video that all wells are different, this has been intended to cover the vast majority of things that you need to think about and talk about when buying a house with a well but there can be others, right? So there are other situations where you might want to have a more in-depth discussion about your well. You do have questions and I can answer them. Feel free to reach out in the video and I’ll do my best, but a lot of times we need to be on site in order to sort of figure out what the setup is. 

Again, make sure that you're not just relying on your home inspector. And if the home inspector says, “yeah, don't worry about it. I'll go over the well”. Ask him, is he going to do a pressure test? Is he going to do a potability test? A lot of home inspectors in this area , they'll do one or the other and some of them will do none at all. So, You definitely want to make sure that a full well test is going to happen and that's simply because doing that test before you move in, can save you thousands and thousands of dollars. Most of the time  these tests nothing comes up but then you know then you know the water is safe and the equipment is good and I will tell you it is worth the peace of mind just to know that. So I hope you enjoyed this video. If you would like to see more home ownership videos, feel free to subscribe and I'll try to keep them coming.

There is always a lot of fascination with the idea of selling your home direct.  No prep work!  Close when you want!  But it's usually true that you can't get something - without giving up something.  What might you give up by going direct?  This video reviews the what and the why for you!

Settlement Update

The settlement was some time ago - but the ripples of that settlement are still shaking out.  So far, I've learned a couple  of things. 

• Most agents can't really tell you what happened
• A lot of agents are being "mis informed" about what they should tell consumers.

I'm not much for misinformation, so if you want to learn what you should know about the settlement before selling your home, this is the video for you! 

In this video, we review how condos have held up as a long term investment vs.  Single Family housing.  Many people think that single families are "a better" investment.  Historical housing prices are easy to get, so we use that information to see who did best!  

Transcript of Video Follows

Hello. Hello, how are you today? Today we're going to talk about whether or not condos are a good investment and whether or not they have been a good investment.  I'm going to Dive Right In here.  

Quick overview: Why are we going to talk about condos because condos today honestly are what most people do for starter housing, right? A lot of times if you talk about traditional starter housing, those would be ranches and capes built in the 40s and '50s, people have a hard time getting super excited about those options. They consider them older housing stock, even though many of them have been updated and they just generally have concerns. So they tend to say, “okay, well, if I want something younger, what are my options?” Usually that option means condo.  But whenever we talk about condos, people are concerned, are they as good an investment as (single family) housing. So today, we're going to talk about whether or not that is the case. 

For those of you who are new to this channel, I am Matt Heisler. I am the broker owner of Vanderbilt Properties here in Massachusetts, I have been selling real estate for 22. 23 years, something like that. I am not an attorney as I like to remind people that I'm not a lender.  Today, I'm going to talk about a 10-year history, which is a pretty long snapshot but past performance doesn't predict future results. While I am optimistic on the future of housing in Massachusetts as an investment because here our economy is strong and continues to grow. However, at the end of the day. You know, if things go into reverse then, so will housing prices. It is a risk. It is a levered investment, anyone who buys a house should understand that. And they should make sure that they are being as careful with their money as they would be buying any stock or any other kind of investment. Okay. 

For housing return,  what I did is I looked at houses in Ashland. Ashland has a lot of condos, so it was a good place to look to do this kind of comparison.  and I looked at homes that were built from 1980 to 2000, okay? And if I look at them, then the average sale price way back in 2014 was $485,000  - a bargain of a deal.  Now if you want to look at this here, those same houses from 1980 to the year. They sold for 923 thousand dollars. So that is a heck of a return over the last 10 years. About 90 percent. So You know, that's great. And that's what we expect to see, right? Because these are houses, these are single family houses. And generally over a long time, we expect to see a robust Return. It’s a little surprising to see it be, you know, around seven, eight percent a year compounded. That's a lot. You know, longer term studies of housing, would only be, you know, maybe four, four and a half percent, but the last 10 years have been good ones. What can we say, right? 

All right. So then we jump and we look at condos how did,  the condos do in Ashland. So, again, I use the same years 2014 and 2024 I looked at Ashland condos that are sold on Captain Eames Street. Those of you who know, Ashland know that there are a ton of condos, On Captain Eames and the surrounding streets.  So many in fact that I was able to get a robust enough data set in order to do this little video. So I thought it'd be a good place to look and it was!  Back then, in 2014, $297 000. Would get to a condo down there today that same condo would be six hundred thousand dollars and the return is 104 percent. So for those of you who are to keep you from scrolling back to the last slide in the video, that means that the condos have actually returned uh a little bit better (than single family housing). An extra 10 better than the single families now. You know, I didn't use hundreds of data points for this. I use a couple of dozen. I think that the data is relatively accurate,, but basically the point here was to show condos aren't lagging when it comes to financial performance, okay? They are going up just as fast as houses. And in some cases they may be going up faster. And that's really the message here. If you have a concern about how, what whether or not a condo is a good financial investment relative to a house, it is basically the same investment, okay? It is housing.

 Now, there are things that make it different. You shouldn't just jump in there and say, well, any condo or any house is going to be a good investment because that's not how it works. Okay? Any house is a combination (or condo), of both cosmetic things that need to be fixed, and  they also have Capital Improvements that need to be done, AC units, and burners and windows and all those things and in a lot of ways, houses and condos are very much the same. You (still) have to assess whether or not those bathrooms need to be remodeled and the kitchens need to be redone and then make sure that the price that you're paying reflects the amount of work that needs to be done. Good news. There's lots of people out there that can help you with this because we look at lots and lots of property and we can figure out what the market rate is for stuff that needs extra work or extra money down the line. 

People who are thinking about a condo or not thinking about a condo, let's talk about the reasons why condos work, They work because for the most part, the construction is relatively moderate. It's not easy to find condos that were built in the 1970s. So most of the time condos that are older than 1980 are actually converted apartment buildings, they were built as apartments and then converted legally into condos, but that's not really the same thing. Those are really, you know, sort of Apartments. Today's condos are basically attached housing, okay? I mean it's the modern day version of the duplex or a Triplex. They have more privacy than some luxury apartments. Obviously there are some really expensive apartments out there that have lots and lots of privacy, but for the most part, condos are going to beat your typical rental apartment.  

The condos can be really great for folks because there's fewer maintenance issues. Let's face it:  leaves, snow, Landscaping, The roof, at almost all complexes, these kinds of things are taken care of by the managing company and a professional management company. Are they a pain in the neck? Sure sometimes. But at the end of the day, they tend to get this stuff done with very little effort on the part of the owner. Of course, the whole reason we're having this discussion is the price.

 Per square foot for housing for condos, it's considerably lower and condos typically are smaller than single family housing. So in the example that I had the average house was like 2,700 square feet in the average condo was 2,000 square feet which is not too shabby. And again, as I mentioned it's sort of like starter housing. You're giving up some square footage and you're getting some some price discounts plus just on a dollars per square foot basis, condos are cheaper. And they should be because you have to pay a maintenance fee, but they are cheaper and ultimately that's what attracts people into that market. Usually, like I know the fees aren't aren't great. But about 70 of the fee, goes to the ongoing maintenance. Okay. It goes to leaves and snow and Landscaping and roof. Obviously, there are a lot of different complexes and there are a lot of exceptions to this.  if you want to know how to find a cost efficient condo, make sure you reach out to me and we'll see if we can't help you find one because not all of them  are  cheap to run. About 30 percent of Your condo fee usually goes into the budget for Capital Improvements, things like roofs decks, those are pretty common things that occasionally need replacement and so everyone puts into the, into the fund for 25 30 years until those things need to be done, and if it happens to happen while you're there, then you're probably going to come out ahead on that deal because it's going to end up costing you less to do the roof of what you paid in. And if it doesn't happen, while he's there, well, That's just kind of how it goes.

 But like I said earlier, not all condos are low risk and low maintenance even though they are a great product, I think that they're a great starter project product for a lot of people.It does make sense to evaluate them, especially today. I mean, they're just as complicated as houses and sometimes more. So even though over time, they've started to get more and more like housing.  You still need to evaluate them. I mean, a lot of them have AC (units).  AC is almost never covered as part of your maintenance fee so you don't want to walk into a condo and have to replace the AC, you know, like right off the bat, you want to make sure that you've had an inspection and you know that that's coming. Similarly, a lot of times, the windows and condominium associations, do need to be replaced. A lot of times, the owners are responsible for window and door replacement, that is an expensive thing to do. You want to make sure that it hasn't already been done and kitchens and bathrooms are expensive everywhere? If your unit was built in the 1980s and it hasn't been remodeled, it's probably looking like it needs to. So you shouldn't be paying the same amount that you would for a unit in the same complex that has been remodeled. And I think a lot of times people have a hard time assessing units inside the same complex, when the conditions can be quite a bit different, they tend to look at the prices and say, well if someone paid this for this, then I should pay this for this, even though there could be a lot of money. In terms of the times of improvements that have been done for one unit versus another. So with all those things set, I hope you enjoyed this video. If you are thinking about condos love to help, there's a lot of great condo complexes in the area and I've seen most of them so I can help have a good one.

Have you ever thought about buying land and building your own structure? There is lots of land out there - but not all of it is high quality, and in fact, much of it has hidden costs or could just be worthless. Land brings a lot of hope and promise, but, like any risky investment, done without the proper due diligence could leave you in a poor spot. Below are the main mistakes that I often see people make when they decide to buy land. Fortunately, some folks have found me before handing over the big check. Others though, not so lucky!

Hello!

Today's tour will take us to Auburn, where we take a peek at Whitman Bailey, a smaller, newer complex for those over 55 years of age.  With garages and plenty of space, but limited maintenance, these are a great option for those looking to downsize - but still want that neighborhood feel.  Conveniently location in Auburn, you can get here and there quickly! 

Remember, if you’d like to see floor plans for these units, or if you’d like to see recent sales, or are just curious about the condo fee in this complex, please reach out to me using the contact page.  I can also help with turnover statistics, and give an overview of the condition that any one unit might 

have (obviously, the older the complex, the more the condition can vary).  Most importantly, I’m happy to help you find something similar, just in case this is close, but not close enough, for your future housing needs.  

Links:

More Condo Information and Tours!

Hello!  Today's driving tour brings us through Forest Hills in Grafton!  Forest hills is a section of a large condo development of several complexes, which differ in age, space and amenities.  Built in the early 2000's, these units usually have garages, and there are over 200 units in Forest Hills.

Would you like more condo tours?

Remember, if you’d like to see floor plans for these units, or if you’d like to see recent sales, or are just curious about the condo fee in this complex, please reach out to me using the contact page. I can also help with turnover statistics, and give an overview of the condition that any one unit might have (obviously, the older the complex, the more the condition can vary). Most importantly, I’m happy to help you find something similar, just in case this is close, but not close enough, for your future housing needs.

Links: More Condo Complexes and Tours!

Find what's for sale in Grafton

Hello! In this post, we're going to talk about reverse mortgages. How they work, and whether they are the best option vs. other types of refinancing or downsizing. I think the conclusions may surprise you. We also review in some detail the financial structure of a reverse mortgage, as it is a unique financial product, and has some unique costs that most buyers are not aware of. Enjoy!

Transcription follows

I'm sort of assuming that if you're thinking about a reverse mortgage, you understand the basics. And then I'm really going to talk about what your other options might be the kinds of other things that you might want to consider. Uh, specifically downsizing to kind of see whether or not these things all sort of make sense. I know for a lot of folks that are trying to solve this problem, they have a lot of different opinions from people that they might ask. And of course, you know, if you ask a loan officer, he's going to say, well, the reverse mortgage is the best thing you can do. And if you ask a real estate agent, they might say, well, downsizing is the best thing that you can do.

I'm going to try and present both of those things as potential options that you can kind of see the trade-offs, which I hope will be useful for everyone. The simplest way I can explain a reverse mortgage is that it's a way to use the equity in your home. And basically, you borrow against the equity in your home and you do that until the home is sold at which point in time that debt is paid off. Unlike a traditional mortgage where you make payments and you pay down the loan balance, A reverse mortgage, you actually can take money out. Literally take money out of the house, and then pay it back later. Now, that's a really neat trick, and it doesn't happen for free.

And so, part of this video is going to be talking about the costs that are associated with it and hopefully what I hope it's a simple way. So, For reverse mortgages, They may make sense for you If you have hundreds of thousands of dollars in equity in your home, they don't tend to work very well over small numbers and someone generally needs to be 62 years or older. There are exceptions. There are a lot of products out there. But the standard product, if you will is an HECM, A home equity conversion mortgage, and that product requires you to be 62 years old. For any Reverse mortgage, You’ll definitely want to make sure that you read and understand the fine print you'll get several opportunities to do that. The loan officer will go over some stuff. There's other safeguards put in, we'll talk about those but just very basically, it's expensive financing and that doesn't necessarily mean that it's bad. But it is more expensive than other types of financing. you want to make sure that you're comparing all the different types of financing before you make a decision. um, and thinking about the math is what we're going to do here today.

If you're just joining us, my name is Matt Heisler. I have been selling real estate for 22 or 23 years or so, I'm not an attorney and I'm not a lender. I'm just a real estate agent but I have helped many people to downsize and I find that many of them are asking the same sorts of questions. And this is the sort of channel that I do is to talk about these kinds of issues and I try to do it in a neutral and non-judgmental way, we try to see where it goes.

Why might you do a reverse mortgage? Well, if you do have a lot of equity in your home, uh, and you'd like to access it to live on, you may find that it is difficult to access especially if you are retired or otherwise unemployed. And the reason is because a bank is going to look at your income and if they don't think your income is sufficient, then they're not going to let you do a traditional refinance or get a home equity loan. A reverse mortgage is a way to access that equity in your home, which you have earned, By the way, it is your Equity you've earned and you should have access to it! And a reverse mortgage will allow you to access it and to stay in the property that you are in for a much longer time than you might be able to otherwise. The good news is that although they're expensive, Some of those expenses may be offset with the appreciation that you continue to earn in your primary residence. Take a look at that, but before considering a reverse mortgage, I generally encourage people to make sure that they have ruled out the other options.

If you can do a regular refinance because you have enough assets, or that you have enough income, Generally, you should do that. That is cheaper. If you can do a home equity line, generally you should do that because it is cheaper. Now, one of the problems with doing it that way is you may not be able to access the full amount of equity in your home. Like you can't get 100% mortgage, right? Like if even if you refinance and you have the assets to do it, they probably will stop you somewhere around 80 /20 for a traditional refinance situation. For a home equity line, they may stop you at 75 of the total equity in the house. But of course, if you do not have any income and what you're talking about, a tremendous amount of money that needs to be paid back. Then, the bank may say no regular refinance, no home equity, you can't do either of those things that still leaves one option. One option is to downsize, and I do talk with a lot of people about downsizing. Oftentimes, there's usually one person who wants to downsize or one person is less excited about it, but it does have, uh, some significant options. if you have a larger house, usually a house larger than what I would say, is 2500 square feet And if you're trying to get into a smaller property, you can usually get the numbers to work. If you've lived in that house for a long time and you have plenty of equity and of course the larger your house is generally the better, those numbers work and another way to make them work is to go from the town that you're in to a less expensive town in Massachusetts, that usually means going north, south, or west of where you are but sometimes you can do it another way. And generally if those are the parameters that you're sort of working with and you'd like to know more about what your house is worth, and what you might have to pay in order to downsize, that's a good time to give me a call.

I'm happy to help you, uh, walk through those numbers or build a spreadsheet if you're inclined. And then we can talk about what the downsizing numbers might be. Sometimes I get called about downsizing and the numbers just don't work because there isn't enough equity in the home or the house isn't, you know, you're going from 1600 square feet to 1200 square feet. There's probably, that's probably not going to work as far as a downsizing option unless you're switching towns. Unless the second town is quite a bit cheaper. Now, when we look at the kinds of costs that you typically have to pay for any kind of financing for a house, we'll start with your basic refinancing option. That's usually around $4,000. This doesn't count closing a lot of the closing costs that come back to you, but just the cost to the bank to do the loan, it's usually $4,000 or less. Now a big difference is if you refinance, you're going to get a fixed rate most of the time or an arm that's good for five or seven or ten years, and a HELOC is going to float, it's going to have a floating rate most of the time, but there again, there are a lot of different products. But at the end of the day, that's a relatively inexpensive way to access a great deal of money and equity in your home. Those are good products to look at. And if you're thinking about retiring, but not retired yet. Um, this might be something that you want to look at because if you refinance you don't they they don't ask for the money back., just because you, you have retired. But if you've already retired and uh, the bank is not enthused about Either of those options for you, then you want to look at downsizing probably and downsizing is a good option if you plan to move. What a lot of folks the way they try to work the numbers is they try to take the equity in their home and pay cash, use all that Equity to pay cash for the next house that they're going to and that could be a great that can be a great financial move because now you no longer have a mortgage, however, you're not as levered to the housing market. Tthe appreciation that you get for your house is a little bit less, but it gives people a lot of security knowing that they do not have a mortgage, they're only going to be responsible for taxes and maybe HOA fees and maintenance. And while that's not nothing, It's, you know, better than having a mortgage to pay. Downsizing is definitely an option. A lot of people in this situation, we're looking to get the equity out of there. Then downsizing is a great way to do it.

The reverse mortgages that especially HECMs those home equity conversion mortgages, they unfortunately have very high fees. Okay, I'll call them closing costs, it tends to be 20 or $40,000 in order to open a home equity conversion, mortgage, uh, and then on top of that, you have to spend pay a special kind of PMI, which is around 2% of the entire loan balance that you have to pay that every year. So, on top of that, the loan rate that you're going to get is going to be higher than what traditional financing is. So, there are really three different ways that a reverse mortgage, is more expensive than the other kinds of financing. And I actually think that those costs are set up that way, because they know, the people who are downsizing are thinking about moving in commissions and all those things and when you add them all up, those things are between 20 and forty thousand dollars too, usually. the cost for reverse mortgage and the cost of downsizing or about the same. The tricky part to remember, is, if you get a reverse mortgage, you may still want to downsize later in which case, you'll basically be paying those costs twice. That's a hard thing to sort of figure out, but if you really want to stay in your home and it's worth the double payment there, in order to stay, having a reverse mortgage is really the right solution for you. Let's see what else here. Safeguards because of the higher cost. and the fees that are associated with the reverse mortgage, uh, in Massachusetts and I think across the country, probably a loan officer is going to refer you to someone who does not work for the bank or the loan officer to make sure that all the expenses and the benefits of a reverse mortgage are covered. That they've been explained to you and that is a good thing. I mean, ultimately, I think for a lot of folks from their main financial decisions they want unfiltered advice, they want the real information, that you make the best decision for themselves, this is clearly an effort to make sure that people who get into this product understand it. Does it, does it work for everyone? I don't know. You know, I I think the calls are helpful. especially when they're done, right? I hope it works for you, but at least they're probably right at least. They're trying to make sure that you understand what is a more complex Financial product. Most people will only get one reverse mortgage in their whole lives. Okay, it's the only time you're gonna do it. It's definitely good to get as many people weighing in on what it is and how it works as possible.

But the $64,000 question is, should you do a reverse mortgage? And as I'm sort of hinted to in this video, I definitely want to make sure that you've eliminated all the other options because on a cost basis, they are a lot cheaper, right? Lower interest rate, a lower entry cost. If you can do some other type of refinancing to access that Equity, it is a good thing to do, right? And if you downsized, basically the feedback that I've gotten from folks, is that it, they generally do it because it, they feel safer, right? Paying off that mortgage is a huge weight off their mind. That is, usually the driving force for people who are downsizing is to try and get rid of as much of that mortgage as possible or eliminate it all together, which is a great thing to do as I mentioned. It certainly should be an option that most people consider but If you want to really stay in the home and you can't use any of the other financing probably can't be a reverse mortgage for that, that is really like the best solution for it. But I do remind people that just because you now have access to all that Equity, you still want to be pretty budget sensitive about it. You don't want to be running up that balance very quickly. Because once it's gone, it's gone and unfortunately because you are paying interest on whatever you pull out of your house as that balance grows so does the interest payment it can really, the clock can really start to run on it and uh, and it means that you'll run out of equity sooner. That you might otherwise and that you don't want to be in that situation, right? Like so, you know, you do still need to have a budget, you do still want to be careful to make sure that that Equity that you've worked hard to put together. Um doesn't run away in a short period of time.

Okay, if you still have questions, I am certainly happy to help with any downsizing math that you might want to do how much your house might be worth, or how much it might cost to go somewhere else. And what that might look like and how old it might be and how nice and what kind of work you might need to do at your place in order to figure out the price that you want for it in today's market. I'm happy to help with all of that and if you look at those numbers and they don't work for you and you're not ready to downsize them, I'd be happy to refer you to someone who does reverse mortgages. There are lots of people who do them and or if you can still do the regular mortgage. I can refer you to someone that way also. And I think my goal here is really to make sure that you're getting the best advice for you. I don't think two people, Who are in similar situations would necessarily always make the same decision. And I think that's what's really interesting about a reverse mortgage or the downsizing choice, is that the, you know, similar people would make different decisions, based on how much risk that they want to do and the kind of way that they want to structure their finances, and I think both Solutions are good, hopefully, you agree. And I hope this video was helpful. Don't forget to subscribe. We'll probably talk more about these kinds of situations later. Take care.

Hello!  Today's tour takes a brief look at Forest Park in Auburn!  These townhouse units are well spaced out, with lots of open space giving a decidedly less crowded, urban feel than many other complexes.  Enjoy the ride! 

Remember, if you’d like to see floor plans for these units, or if you’d like to see recent sales, or are just curious about the condo fee in this complex, please reach out to me using the contact page. I can also help with turnover statistics, and give an overview of the condition that any one unit might have (obviously, the older the complex, the more the condition can vary). Most importantly, I’m happy to help you find something similar, just in case this is close, but not close enough, for your future housing needs. Also, you can see more complex information and other tours here!

It's time for my video newsletter of the housing market in Massachusetts. We'll look at how well home sellers and home buyers fared this year, and the factors driving pricing. We'll also talk about the election results and the impact that could have on the housing market. I also cover some interest rate discussion about where we are headed, and the impact that could have on the real estate market. Lastly, I'll discuss Bell Curve Buyers and do a forecast for early 2025 - which is right around the corner!

Transcript Follows

I noticed lots of people are checking out these videos. I will try to go over the data quickly to Understand where we're at, and where we might be going for the market, obviously, a lot of the buyers are talking about interest rates but unfortunately, The interest rates have failed to uh, stop the rise in prices, so and the reason is because there's not enough houses to go around. And because there's not enough houses to go around the number of transactions remains well below the historical, average of the last 10, 15, 20 years. I actually saw something that nationally this year we're probably on pace to sell the same number of houses, we sold in the late 1970s, even though the population is 30 percent bigger, so that sort of gives you an idea of the fact that uh there's really not enough houses to go around for everyone and it's a big problem and it's a hard problem to fix and it's not going to get fixed quickly. When you look at the data, it's right there in front of you, we're basically going to sell the same number of houses that we sold last year in 2023, but that's well down from 2022, which is well down from The 2020 levels, the 2019 level. And if you're looking for additional evidence that the market remains strong, the days on Market remains at 15 for properties, that are under agreement, that's incredibly short. There's two ways you can look at days on Market, the average days on market, for the properties that are still on the market that have not sold, and the ones that have sold. The ones that have sold are the ones that finally found a market price, and a buyer. That number to me is the most important. The most telling and that number is at 15 which is just incredibly fast, 30 45, somewhere in there would be considered a normal market and I would still expect prices to be rising if they were that long, but when you see numbers like 15, there's a lot more pressure on prices than you would think even with interest rates where they are, If you are looking for some hope, Okay. the number of rentals is up from 4,000, it's up about 20%. The number of single families is up about 70, 80 percent and so we are seeing the inventory in both areas rise. More rentals takes first-time, buyers out of the market and creates more housing for other folks. The number of single families. Obviously the more of them that are out there the less pressure there is on prices to go up, but we're still very short of where we need to be for a neutral housing market. Let alone a market where housing prices might be falling. I know that when I take buyers out we're very lucky if we can see one house a weekend like that's it. You're not I can't say oh great. Let's go out and see four houses this weekend. There's just not enough houses in your particular price and Town segment to go see four houses. There's just not that kind of inventory, The prices are up year over year. That shouldn't be a surprise to anyone at this point. But we are starting to see with a pullback from the spring super Spike, which I talked a lot about in my last report, that continues, with prices are still sort of normalizing from what was a very intense and difficult Spike for buyers to navigate. For houses that have not sold if we look at the days on market for that, uh, believe it or not, that's those are actually down both in Worcester County and Middlesex County. That just tells me this Market remains Very difficult for buyers and very good for sellers. If you're overpriced, it's getting harder and harder to sell. The buyers are getting a little bit more Discerning and a little bit, less likely are willing to overpay, I've got a bell curve coming up in a couple of slides and uh you're going to see why the amount of inventory tends to take some of that overpricing out of market. So going forward, this time of year, we don't usually see a lot of sellers between December and March. And so what that usually means is that the inventories from this point forward will probably start to get smaller. Uh, as the buyers chip away as what's there, and not enough inventory comes on to replace it. Rates have come down. And so in the springtime, that will probably increase buyers, maybe a little, maybe a lot. Um, but it's unclear. How much interest rates are going to continue to fall because the National Housing picture itself is very unsettled. And what I mean is across big chunks of the South and the Midwest, they are seeing a softening in. Uh, in pricing. Uh but up here in the Northeast and in other parts of the country it's still very very tight Market. It still favors sellers a dozen fairly acquires where other parts of the country. It's more neutral. If housing continues to deteriorate across the country, the FED will probably lower feel more pressure to lower interest rates to sort of solve that problem. Um, but if they do that, it could make things tougher up here. If they decide the housing Market's, okay, they may continue to leave interest rates where they are and allow it to continue to soften. So Really don't know what the fed's going to do. They have a much better idea of the national picture than I do. But I do keep an eye on it just to try and The game out, what it is that they might be thinking, obviously the election is, is in the past. So, uh, president-elect, Trump is headed in a lot of people might be thinking, well, maybe that will change the housing market. Presidents. Historically are not able to create Supply. They can't magically put houses on the market. I don't expect Trump will be able to do that either. They don't control interest rates, the FED does, and the FED is fairly proud and of their independent nature, and they tend not to listen to the president's overly much about what they think the economy needs. So, There aren't really a lot of good Solutions. That the president can do to affect housing in the short term long term. They can create policies that change the supply and demand, Dynamic of housing. But that's all very far down the road. It's not even in office yet. I don't expect any real changes for 2025 just because he's in the White House. So, But I, I did want to go over this. I promise I I tease this slide a little bit a couple slides ago. Um, and I know a lot of people have been saying, well, I don't understand why, why does a lack of inventory? Push prices up and it's because if you take all the buyers and you put them into a bell curve. Then when you look at the buying end of the bell car of the people who are okay, Uh, who are really active in looking to buy a house. You can break them up into three groups. So the biggest group as you can see here at the peak of the bell, curve are the people who are willing to pay fair Morgan, Okay, they look at historical prices. They have a pretty good feel for what they should pay for house and they're happy to pay it. The next group are the price pushers. These people understand what the fair market is, but they're willing to pay a little bit more. Two, maybe 3% over what fair market is because they want a house and the last two or 3% that they pay is less important to them. And then the smallest group is the market Movers. They want a house and they're not interested in competing with the price pushers or the fair market value people. They're gonna pay over what the house is probably worth because they need the house or want the house more than they need the money. Now, if you're thinking to yourself, well, who needs the house more than they need the money? Then you're not in the market, mover group. And don't feel bad. Most of us are not in that group. Okay? The market mover group is five to maybe even eight percent of the market at any one point in time. It's always there. The price pushes the market, Movers are always there in that market. But if there's enough housing for all the fair market people, and all the price pushers and all the market movers, the price pushes and Market, Movers don't have to pay extra, so they don't. But when there's not enough houses to go around, then the people who control the prices that get paid or the market movers and the price pushers, if there's not enough housing for the price pushers, the market movers do all of it and during the pandemic, the market movers were the ones who were pushing the prices up 10 percent a year. Okay. So, uh, the price pushers were sort of, in that group too. You know, honestly, a lot of people had moved into the market, mover group and were willing to pay what they need to pay in order to lock in those ultra low interest rates. So that's a strategy that so far looks to have paid off for them. You know, again typical market dynamics, we wouldn't see that, but if there's more inventory, If there's enough inventory, then the market Movers and price pushes and fair market. People do not have to pay much more than fair market value. So they don't. So what we really need is inventory, so that the market movers and price pushers, don't control the prices that are paid. So, I hope that sort of explains Uh, from the economic standpoint, why the inventory levels are so important. And why, my last couple of market reports for the last few years, have really focused on the amount of inventory that's out there. I'm gonna put a slide up that has the key vocabulary terms that I've used in here because I know sometimes I talk in industry speak and sometimes people might not be able to follow what I'm doing and as always, I do these market reports because I am an active agent in your Market, I try to give people a little idea about what's coming and I can do the same thing for your house. So if you want to be part of the market in 2025, reach out to me, I'll make sure that you get the absolute best information that you can about how to position your house in the market. That's going to be rapidly changing over the next three, four, five months. So, it could get tighter could get looser, my bet is that it will get tighter but we really won't know until we turn around and look at the inventory levels in March. All right, have a great day. Hope to see you soon.