Monday, October 30, 2006

A Cautionary To Sellers: "Pride goeth before a fall"

Since the housing market topped out in Massachusetts in 2005, there’s been a stalemate between buyers and sellers, the result being inventories as well as time on market doubled in some areas. Buyers are confident they’re in control and sellers are still optimistic hoping to get their price, because their house is different, special and better than the one for sale down the street. By some estimates, one third of sellers in our market are not serious about pricing their properties to sell.

The market is stuck with buyers saying they’re not going to pay too much for that house, and sellers optimistic and insistent upon getting their price. According to Mark Zandi, chief economist for Moody’s, “It could take a "Roto-Rooter" to finally flush stubborn sellers-and their market-clogging inventory-from real-estate listings.” Zandi concedes that the market could temporally stabilize as housing starts slow down and sellers remove their properties from the market during the winter with the idea of reintroducing them as fresh and new at a later date. "But it could very well be a dead-cat bounce," says Zandi, because if inflation pushes up mortgage rates, "it'll come right out of housing prices again."

Sunday, October 29, 2006

WiFi service technology is coming to Martha's Vineyard --- we hope.

Martha’s Vineyard has wrestled with modern convention for years, saying no to fast food chains, stop lights and an over saturation of cell phone towers that would mar the scenic Island country side.

Intermittent service and dropped calls are commonplace and a constant frustration for those of us who rely on cell phones for immediate access to clients and colleagues. Anyone going “up-Island” knows it as the communications black hole. Visitors used to the uninterrupted service they take for granted in America are particularly impatient and consider it totally unacceptable. It’s not uncommon for them to ask prior to booking a vacation rental, “Will I have good cell coverage at the house?” Some people have to maintain two cell service accounts in order to ensure more reliable communications. Well, it appears that we’re getting a little closer to a solution, and may finally be entering the WiFi communication age on Martha’s Vineyard. (Click here to read) WiFi coverage without towers.

Incidentally, there is another technology, WiMax, that will eventually enhance or displace WiFi as well as attract subscribers from cable and DSL. However, it’s currently more expensive, geared more toward commercial use and not as developed as WiFi. The main benefit of WiMax will be range. WiFi’s range is about 100 feet, whereas WiMax will blanket a radius of 30 miles with wireless access.

Friday, October 27, 2006

What do San Francisco, Los Angeles, Seattle, New York and Boston Have In Common?

They are all considered Bubble-Proof Markets. Boston is number four on the list.

Make sure you take a look at Where To Buy, Where Not To Buy, and the Top Ten Foreclosure Markets.

How do you know you are from Martha’s Vineyard?

I found this parody of Jeff Foxworthy's "You know you're a Redneck" on a fun site called

You Know You're From Martha's Vineyard When...

You refer to everything besides the Vineyard as off-island.

Walking through a pond to get to a beach party is normal.

Driving on the highway is scary.

Paying 2.16 a gallon is normal for gas.

You've found out that you dated your cousin.

You know everything about everyone on the island.

You think Nantucket sucks.

You think Circuit Ave. is the place to be in the summer.

Giordano's opening means the beginning of summer.

You've been pulled over at least once driving through Vineyard Haven at night.

A tourist has asked you, "People really live here all year long?"

Up-island is so far away.

You've been pulled over by Trophey.

You've seen Bill Clinton at least once.

You've eaten at the famous Black Dog like twice in your whole life.

You refuse to drive through Vineyard Haven during the summer.

You know what Biga, Humphry's, Alley's and Dockstreet are.

You know that South Beach is for the College Kids and Tourists.

Oaks Bluff and Mihisma are not part of your vocabulary.

Off-islanaders assume you are rich yet you don't seem to know a single person who is.

You considered Oak Bluffs the ghetto of the Vineyard.

Taking a boat to get anywhere is normal to you.

You're out to dinner and Val Kilmer sits right next to you.

You know that smoking weed is just part of the island tradition.

You've been to at least 5 beach parties in the last year and 4 of them have been broken up by the cops.

You still refer to Aquinnah as Gay Head.

Your road rage is ten times as bad during June as it is in January.

You still drive through the Blinking Light forgetting the stop signs.

You've been to late night munchie stops at Cumbys because that is the only place open till midnight.

You actually get these jokes and pass them on to other friends from Martha's Vineyard.

Thursday, October 26, 2006

Timing Is Everything

An article in the Washington Post suggests, despite the fact that we are experiencing consecutive record price reductions in the market, we may be approaching the "trough in the market" according to Lawrence Yun, NAR's senior economist. Yun attributes the slump to what he calls "confidence issues. Read the entire article here. If you're a serious buyer sitting on the sideline waiting for the bottom to arrive, I'd like you to think about this: What is going to happen when that time comes? Will you be the only one entering the market to snap up the choice properties before prices go up again? I think not.

Tuesday, October 24, 2006

When Will Our Real Estate Market Turn Around?

If you’re following my Blog it’s probably because you have an interest in Martha’s Vineyard Island. I think we can all agree that Martha’s Vineyard is a special place and not for everyone. Clearly the higher price of real estate and practically everything else related to the standard of living here supports that notion. When the real estate market started to soften across the nation, our market remained strong, and in fact the market softening was not across the nation, it was for the most part in specific pockets like California, Arizona, Nevada, Washington DC Metro, New York, Florida and the Carolina's. However, the news media didn’t make that distinction in most of their inflammatory editorializing, so our Boston, Cape and Islands market came to a grinding halt except for the top of the market that’s impervious to most market fluctuations. Many experts have predicted that this downturn in the market, nationally, will not be long lasting because, nationally, the economy is strong. The Boston Globe just published an article that supports that belief and if their data is accurate, we are walking in the valley of the real estate market downturn. I say "we", because I believe as Boston goes, so goes the Cape and Islands. You can believe it, or not.

Thursday, October 19, 2006

Affordable Housing Comes To Edgartown

Back in 1998 the subject of an affordable housing project came before the town of Edgartown. As you can see from the pictures below, the project is very much under way. Construction is all modular. To get some of the back story on this project read the January 2006 MV Times article on the Pennywise Path Affordable Housing Project.

Wednesday, October 18, 2006

For Your Protection: Get a Home Inspection

It is my belief that all Martha's Vineyard homes being purchased should have a Home Inspection. I’m insistent that my Buyer Clients always have a Structural and Systems Inspection, no matter how old or new the house is. I even explain the procedure on my Website, as well as other Environmental Issues such as Radon and Mold. I have a list of Home Inspectors with related links along with other engineering services such as Radon testing on my Martha's Vineyard Island Service Providers page.

For your protection, please look at the revised HUD-92564-CN form, then read the Mortgagee Letter below from The Federal Housing Administration.

October 5, 2006



SUBJECT: Revision to form HUD–92564-CN, “For Your Protection: Get a Home

The Federal Housing Administration (FHA) has revised form HUD-92564-CN “For
Your Protection: Get a Home Inspection.” The purpose of this revision was to create a more conspicuous, easy-to-understand document that informs homebuyers of the availability and importance of getting an independent home inspection. The form also provides clarification of the differences between an appraisal and a home inspection and stresses the importance of radon testing.

Mortgagees are required to provide the document to prospective homebuyers at first contact, be it pre-qualification, pre-approval, or initial application. In any case, the mortgagee must provide the form to the prospective borrower no later than initial loan application. A copy of this revised form in a PDF file format is available online at

FHA has also eliminated the requirements that the form be signed by the purchaser and included in the case binder submitted to FHA with the mortgagee’s request for insurance endorsement. This Mortgagee Letter supercedes those portions of HUD Handbook 4165.1, Section 1-5, Table 1.1 Binder Assembly and Appendix XIX, Pre-Endorsement Review Checklist requiring the form to be included in the case binder. Additionally, this Mortgagee Letter rescinds, in their entirety, Mortgagee Letters 2004-04 and 2005-01. Mortgagees may use the revised form HUD-92564-CN immediately but must begin using the revised form for new loan applications taken after December 1, 2006. This Mortgagee Letter applies to FHA-insured forward mortgages only and not FHA-insured Home Equity Conversion Mortgages (HECM).

Color copies of this revised form will also be available free of charge through HUD’s Direct Distribution Center by telephone Monday through Friday from 8:00 AM to 5:15 PM ET via toll-free number 1-800-767-7468 by December 1, 2006. Online service orders can be placed 24 hours a day, seven days a week at HUD’s website When ordering online, follow the instructions provided and enter the Item ID number only. To order hard copies of the document in black and white print, the Item ID number is 6535. To order red and white colored copies of the document, the Item ID number is 7094.

Information Collection Requirements

The information collection requirements contained in this document have been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned OMB control number 2502-0538. In accordance with the Paperwork Reduction Act, HUD may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection displays a currently valid OMB control number.

If you have any questions concerning this Mortgagee Letter, please contact the FHA Resource Center at (800) CALL-FHA or (800) 225-5342.


Brian D. Montgomery
Assistant Secretary for Housing-
Federal Housing Commissioner

Saturday, October 14, 2006

Five Costly Mistakes Made By Home Buyers

I think this article written by the renown real estate expert and syndicated columnist Robert J. Bruss, is very pertinent for my BUYER clients considering the real estate market we're in right now. Here it is:

Home buyers: 5 costly mistakes to avoid
Satisfaction ensured with own agent, key contingencies

By Robert J. Bruss October 13, 2006

Fall 2006 is proving to be a great time to be a home buyer (but not such a great time to sell your house or condo). In most cities, it's a very strong "buyer's market" for homes.

A buyer's market means there are more houses and condominiums listed for sale than there are prospective home buyers in the marketplace. "The buyer is king" is another way of saying home buyers can negotiate hard for price and terms in today's market.

The number of brand-new and resale homes available for sale nationally is at an all-time high. However, because home sales depend on local conditions, the situation in the town where you want to buy might be different.

But savvy home buyers still need to be cautious to avoid making home buyer pitfalls. Here are the five most costly mistakes home buyers make unless they plan carefully:

1. FAILURE TO GET PRE-APPROVED IN WRITING FOR A HOME MORTGAGE. Most home buyers need to obtain a home loan to purchase their house or condo. Smart buyers shop for a mortgage before searching for a home.

Although it's fun to "shop" for a house or condo on the Internet -- where more than 70 percent of today's home buyers begin their quest (according to the National Association of Realtors) -- the smartest home buyers get pre-approved in writing by an actual lender so they know the maximum mortgage amount available.

The first step to obtain a home mortgage is to check your credit reports from the three major credit bureaus, Equifax, Trans Union and Experian. You can get free copies of your credit report once a year at or by phone at 877-322-8228.

However, those free credit reports are virtually worthless when shopping for a mortgage because they don't include your all-important FICO (Fair Isaac Corp.) credit score, which most lenders use to qualify borrowers.

The best place I've found to check all three credit reports is on the Internet at For about $45 I obtained copies of all three credit reports, plus my FICO score. With a FICO score of 700 or above, you should have no problem obtaining a home loan at the best interest rate and terms.

If you find credit-report errors (reportedly, over one-third of credit reports contain wrong information), be sure to follow the procedure stated to correct those mistakes.

For example, several years ago one of my credit reports said I owed unpaid property taxes. That was incorrect. However, it hurt my FICO score. I followed the procedure to "verify" the error. Credit bureaus then have 30 days to do so. Because the mistake couldn't be verified, my credit report was corrected and my FICO score improved.

Armed with your corrected credit reports from all three credit bureaus and your FICO score, the second step to obtain a home mortgage is to shop among mortgage lenders for a written pre-approval. Most lenders don't charge for pre-approvals (because they know you probably won't shop further after you are pre-approved).

Be sure the lender gives you a pre-approval letter, not just a pre-qualification statement, which means only "We think you can probably get a mortgage based on your submitted information but we haven't really checked."

2. FORGET TO WORK WITH YOUR OWN BUYER'S AGENT. The second major mistake some home buyers make is they forget they need their own buyer's agent. It's very easy for prospective buyers visiting weekend open houses to let the listing agent they meet prepare the purchase offer.

Whether that listing agent acts as a "dual agent" representing both the home seller and buyer (an inherent conflict of interest) or the listing agent represents only the seller (and nobody represents the buyer), such a situation is not in the home buyer's best interest.

To find a reputable buyer's agent, home buyers should ask friends, relatives and business associates for recommendations of local agents.

It costs home buyers nothing extra to have their own buyer's agent. If the home is listed for sale, the listing agent will split the sales commission with the buyer's agent. In the rare situation of a "for sale by owner" home, most FSBO (fizz-bo) sellers are only too happy to pay the buyer's agent half of a customary sales commission, usually 3 percent.

However, home buyers should be careful not to sign an exclusive buyer's agent contract for longer than 30 days, just in case the recommended buyer's agent turns out to be ineffective.

3. BUY A HOME WITH AN INCURABLE DEFECT. In the current buyer's market in most communities, where there are more home sellers than qualified buyers, house and condo buyers can afford to take their time and be "picky."

No home is perfect. Even brand-new houses and condos have their defects. Thankfully, most homes don't have major defects, such as being located next to a noisy railroad track or a freeway. Smart buyers think into the future and ask, "Will I have any trouble selling this home because of its problems?"

Serious incurable defects are called "economic obsolescence" by appraisers. Examples include a bad floor plan, poor location (such as adjacent to high-voltage power lines or the city dump), noisy street traffic, or lack of onsite parking.

4. FAIL TO INSIST ON A COMPARATIVE MARKET ANALYSIS (CMA) BEFORE MAKING A PURCHASE OFFER. Amazingly, many home buyers still follow the old rule: "Offer 5 percent below the asking price." That makes no sense.

Instead, smart home buyers ask their buyer's agent to prepare a written comparative market analysis (CMA) before making a purchase offer. This CMA is the same form the listing agent prepared for the home seller.

It shows recent sales prices of comparable nearby homes, asking prices of similar neighborhood listed residences, and the asking prices of recently expired competitive listings (usually overpriced).

With the help of the buyer's agent, smart buyers then discuss the pros and cons of the homes on the CMA before arriving at a reasonable purchase offer price.

5. NEGLECT TO INCLUDE TWO KEY CONTINGENCY CLAUSES. Way back in the hot home seller's markets of 2005 and 2004, it was common for home buyers to make "all cash, no contingency" purchase offers. The current buyer's market in most cities has changed that foolishness.

Today's smart home buyers include at least two purchase-offer contingencies: (a) a satisfactory lender's professional appraisal of the home for at least the purchase price, and (b) the buyer's approval of a professional inspection report to be obtained at the buyer's expense.

Depending on local custom, additional inspection contingencies might include termite or pest control, building-code compliance, energy efficiency, and radon.

A controversial contingency makes the home purchase contingent on the buyer's sale of his/her current residence. Many home sellers refuse to accept such a contingency. Others will accept it but with a 48-hour release clause if a better purchase offer from another buyer materializes.

SUMMARY: Although home buyers are in control of today's residential sales market, they still need to be careful to avoid costly mistakes. Smart home buyers, with the help of their buyer's agents, can protect themselves when buying a house or condo to be enjoyed for many years.