Loan Modification Will Protect Home Values

This week we’ve decided to write about an issue that has many of us scratching our heads. When it comes to the real estate market right now one thing is very true, low prices and low interest rates have never made it a better time to buy. Some markets have actually started to turn around. Phoenix, AZ and South Florida, have reported a significant increase in sales. 

Many of these sales are most likely due to the high foreclosure rate which continues to saturate our market with inventory, thus bringing prices down. If foreclosures were to stall and loan modification mandated by the government, then we may have a chance to move more property and preserve home values.

Massachusetts Attorney General Martha Coakley has filed legislation to require lendors to work with struggling homeowners who are current, modify their loans and prevent foreclosure. This law would apply only to homeowners who need to modify their risky interest only, adjustable mortgages or teaser rate mortgages. Homeowners would modify their loans to a more financially palatable product, thus preventing an unnecessary foreclosure.

In 2008, 12,430 homeowners lost their properties due to foreclosure. This was a 62% increase from 2007.

But how do banks feel about loan modification? We called two large lendors to find out what their policy is for homeowners who are struggling, yet current on their loans.

Let’s take Countrywide Home Mortgage and Indymac Bank. Giants in the industry, who were saved from demise themselves last year, have it in their control to save homeowners from going under.

Both banks have the following plan: Don’t pay your mortgage for three months then they’ll talk to you. Until then, they won’t work with you, period. Indymac does have an online form that can be completed in order to put you on a waiting list, just in case you default.

Here’s the problem. Honest, hardworking mortgagors, who are now victims of the recession, are trying to make good. The inability of these banks to effectively address this large demographic, will only lead to more foreclosures and further deterioration of the real estate market and will ultimately further impact the failed economy.

Attorney General Coakley adds that "Loan modifications stabilize the marketplace, stop the escalation of foreclosures, and ensure cash flow so that mortgage and mortgage-backed investments can again be valued,"

With refinancing difficult for some consumers, modification may be their only choice. It is just good business to work with loan modification when the average foreclosure costs a bank roughly $50,000. When a consumer’s credit is already negatively impacted, their level of motivation to work with a bank and prevent foreclosure is dramatically different than when they have something to save. 

It will be interesting to see what the outcome will be of the Attorney General’s efforts.

The Year in Review Part 3: Wellfleet

This week, we review Wellfleet’s final sales figures from MLS along with a comparative analysis of this year in relation to the prior two years. Our data comes from the Multiple Listing Service and does not include private sales. The vast majority of sales that occur in this market are MLS sales.

There were 60 properties sold in Wellfleet in 2008 with a total sales volume of $31,733,802. 
There were 93 properties sold in Wellfleet in 2007 with a total sales volume of $55,814,425.
There were 74 properties sold in Wellfleet in 2006 with a total sales volume of $42,099,750.

See the SIR Web site's "Real Estate News" Blog (click here) for tables on the following: Number of Properties Sold with Median Sale prices in Wellfleet, Average Days on Market of Sold Properties in Wellfleet and Percentage of Sale Price to List Price in Wellfleet.

Highs and Lows

The lowest priced condominium property to sell this year was a 2BR cottage located at 420 Chequessett Neck Road which sold for $244,000. The unit, located at Chequessett Village Condo, is 3-season and has 352 SF. The lowest priced single family was located at 80 Pleasant Point Road and sold for $255,000. It is a 1BR/1BA home located on a 3/4 acre lot in South Wellfleet.

The highest priced condominium to sell was a year round waterfront unit located at the Sea Shells Complex with a private association beach. The 900 SF free standing unit with 3BR/2BA sold for $644,000. The highest priced single family home to sell was a contemporary home built in 1996 and located at 60 D Street on Lieutenant’s Island. The property consists of 5 BR, 3.5 BA, with 3238 SF and is a quick walk to a sandy beach.

Market Trends

Wellfleet appeared to be hardest hit by the market down turn in 2008, with sales volume down 44% over the prior year. The slow down is also reflected in the increased Days on Market figure for single family homes which is averaging 249 days. The market has seen some activity of late however. There are currently 84 Single Family homes for sale, with 7 properties under agreement. There are 23 condos on the market with 1 unit under agreement.

The Year In Review Part 2: Truro

This week, we review Truro’s final sales figures from MLS along with a comparative analysis of this year in relation to the prior two years. Our data comes from the Multiple Listing Service and does not include private sales. The vast majority of sales that occur in this market are MLS sales.

There were 74 properties sold in Truro in 2008 with a total sales volume of $42,903,850. 
There were 61 properties sold in Truro in 2007 with a total sales volume of $36,974,833.
There were 56 properties sold in Truro in 2006 with a total sales volume of $37,325,075.


See the SIR Web site's "Real Estate News" Blog (click here) for tables on the following: Number of Properties Sold with Median Sale prices in Truro, Average Days on Market of Sold Properties in Truro and Percentage of Sale Price to List Price in Truro.

Highs and Lows

The lowest priced condominium property to sell this year was a unit located at 82 Shore Road which sold for $126,000. The unit, located at Salt Air Condominiums, is seasonal and has 806 SF. The lowest priced single family was located at 9 Highland Road and sold for $360,000. It is a 3BR/2BA home with approximately 1500 SF and an in-ground pool.

The highest priced condominium to sell was a seasonal cottage located at Roseville Condo on Corn Hill Beach. The 820 SF cottage with 3BR/1BA sold for $425,000. The highest priced single family home to sell was a contemporary home located high on a bluff at 20 Great Hills Road. The property consists of 4 BR, 3.5 BA, with 4650 SF and has panoramic water views.

The Year in Review Part 1: Provincetown

The year-end numbers are in. Over the next three weeks, we will review the final sales figures from MLS along with a comparative analysis of this year in relation to the prior two years. We’ll start with Provincetown this week, and we’ll look at Truro and Wellfleet in the coming weeks. 

Our data comes from the Multiple Listing Service and does not include private sales. The vast majority of sales that occur in this market are MLS sales.

There were 151 properties sold in Provincetown in 2008 with a total sales volume of $88,098,251.* 
There were 165 properties sold in Provincetown in 2007 with a total sales volume of $85,902,800.
There were 158 properties sold in Provincetown in 2006 with a total sales volume of $82,653,453.

* Sales figures exclude timeshare properties.


See the SIR Web site's "Real Estate News" Blog (click here) for tables on the following: Number of Properties sold with Median Sale prices in Provincetown, Average Days on Market of Sold Properties in Provincetown and Percentage of Sale Price to List Price in Provincetown.

Highs and Lows

The lowest priced residential property to sell this year was a studio condominium located at 962 Commercial Street at the Last Unicorn Condominiums in the East End. The unit has 190 SF and sold for $130,000. 

The highest priced property to sell was the Murchison Estate located at 2 Commercial Street in the West End. The property is a landmark in Provincetown, with the main residence having been developed under the supervision of Walter Gropius and associates and completed in 1957. The estate consists of 3 buildings and a pool on 3.5 acres. It sold for $6,550,000. As of this writing, the word is that the new owners have plans to develop the property into 9 building lots.