By Josh Resnek
All of us who own property understand this: prices are not rising. In fact, they are dropping back from incredible highs.
The frenzy that surrounded listings, all listings for real estate here has subsided, and in many cases, has fallen back from the all-time highs reached last year before the Fed started raising interest rates.
And before the start of raising interest rates, the inflation gripping us now was sweeping into high gear.
All this has conspired to make the present Everett real estate marketplace difficult, according to the well-known and highly-respected broker Sandy Juliano, owner of JRS Real Estate in the city.
For the average person buying a single family home prices are going down, said Juliano.
“An average size home on an average size lot the prices are declining. Prices are definitely not going up. Prices are down about 10% from the highs of last year.
“Part of it is that we are in the middle of winter. Winter is always a light sales period. The question is, will the declining real estate marketplace recover in the spring? it might, “ she said.
Juliano said that when prices are falling, people tend not to place their properties up for sale.
“With the fed talking about another interest rate increase, that won’t help the local real estate marketplace. It can’t. It’s not going to make for a good spring if there is another hike. We’re not in a good spot right now. It has to do with inflation. When you go to get a mortgage banks look at your income to expenditure ratio. Then inflation is ruining that equation. People have less buying power today. They have to pay more for heat, water, electricity, and now interest rates have soared. This is causing a bad turn in the real estate marketplace,” she added.
She described several properties that sold recently to magnify her comments and to justify them.
A home that has been for sale for 154 days on Bettinson Avenue, which she described as a quiet little street with cute houses right off Central Avenue, is on a lot smaller than 4,000 square feet with the house containing 4 bedrooms and 3 bathrooms and a finished basement was listed some months back for $680,000.
“There have been no takers. In November the price was dropped to $650,000 and there are still no takers,” she added. “But how could there be?” she wondered.
The purchase of a $650,000 home requires a down payment of 20% or in this case, $130,000. Now the potential owner needs to find a $530,000 first mortgage at 5% (because of higher interest rates). That will cost about $4,000 a month with taxes and insurance.
“What average person or couple can afford that?” she wondered.
Single family homes have sold recently on Bell Rock Street and Kenwood Road in North Everett. The Kenwood Road property was listed at $459,000 and sold for $645,000.
Juliano said that multi-family homes are holding onto their higher prices than single family homes.
“It is dependent on how big the property is and how large a lot it sits on,” she said.
A recent Harding Avenue two-family sold for $729,000 after being listed for $729,900, a great victory in the declining marketplace.
“We’re all hoping for a big comeback in the spring to sell properties. Once we get to March the marketplace opens up a bit. But we all must understand that if the fed continues raising the interest rates, it’s going to kill the real estate marketplace – not just here, but everywhere,” Juliano said.
Investor/developers buying multi-family homes in Everett at high prices in the down market do so because they can add many units by converting the properties and derive the income from those added units and still cut a good profit after paying for new construction.
“There’s a lot going on. It’s not all good,” Juliano concluded.