What Road will Berkshire Real Estate take?

I recently spent a sunny afternoon looking back over 23 years of statistics for the Berkshire Housing Market.  I was seeking some indication of what is in store for the Northern Berkshire Housing Market in 2010.  However, as Yogi Bera once said “predictions are difficult to make, especially about the future.”

That verity aside, I do believe that statistics provide some useful assistance to us as we look ahead, and so does information about the state of the general economy, historical trends, and so forth. Taking all of this in to account, it is my expectation that the level of inventory will remain at higher average levels for some time to come and will take longer to absorb than the past, leading to longer days on the market on average as well.

These changes will not only effect Berkshire real estate, but the industry as a whole.

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The new year promises some changes to the Berkshire real estate market, as well as the market as a whole. So what road will the real estate market take in 2010?

Here are some of our 2010 Berkshire real estate predictions:

1. There will be a greater diversity of buyer types.  This ranges from seniors with little or no interest in high technology to the middle range of empty nesters who have a mixed level of technological interest and expect instant response to their text messaged inquiries.
2. Top Realtors® will need to be on the leading edge of technological advances–such as Facebook, Twitter, and mobile applications–in order to provide accurate, meaningful, and advanced services and results to their clients.
3. Part time practitioners will struggle to keep up; full time professionals will continue to expand their market share. For clients seeking superior results, the full time professional will be the preferred and necessary option although “friends” and “relatives” of part timers will always account for some business, sometimes to their client’s disadvantage however.
4. That being said, requirements by law and the costs to remain in the business will steadily increase which in some cases will cut out the weaker and less dedicated licensees
5. The stock market will advance, real estate values will stabilize and consumer confidence will improve modestly. Job growth will be slow and as such will continue to be a dampening weight on any potential rebound.
6. Downsizing, rightsizing, and greening will be significant trends and have an impact on value
7. There will be more single and alternative household formations as compared to traditional families.
8. Condominium sales will remain relatively strong for the obvious advantages to today’s busy lifestyles and shrinking family sizes. There is a substantial oversupply of condo conversions of former apartments and these will not fare so well.
9. Along with the aging of the baby boomer population, more growth in the sunbelt and even overseas as Americans discover attractive and less expensive foreign alternatives such as Central America.
10. No new housing price bubbles in sight. Baby boomers selling one of their two homes, relocations out of the area,  job losses, shrinking populations in the Berkshires: these trends as well as the losses suffered by speculators and get rich quick flippers, will all help to keep prices at moderate levels.
11. First time and repeat buyer tax incentive programs will attract qualified buyers and motivate them to take action before these programs expire thus helping to stimulate the market in important but still modest ways.
12. Many sellers accept diminished expectations and in some cases where they purchased during the boom, even losses.

What are your real estate predictions for 2010? We’d love to hear them.

Stability, fixed expense, equity building, an excellent learning experience…. and a college education?  Does it sound too good to be true? Buying a home for your college student to live in while s/he attends college is one potential investment option that could benefit everyone.

The student benefits from the stability of knowing they will not have to search out a different apartment each year before returning to college.  The cost will remain stable as fixed mortgage rates lock in the monthly cost.  A location close to the college reduces transportation expenses.

Where better to try this innovative strategy than with our beautiful Berkshires real estate? We have four colleges in the Berkshire, and they include:

Affordable home in Williamstown MA

• Williams College located in Williamstown

• Massachusetts College of Liberal Arts located in North Adams

• Berkshire Community College in Pittsfield

• Bard College at Simon’s Rock in Great Barrington.

Your college student owning a home has its benefits:

• No storing furniture over the summer break
• Security deposits will not be required each semester.
• Students can choose share the expenses of home ownership by taking in another student and splitting the monthly home costs.
• Students learn about the process of investing in real estate along with the responsibilities that go along with property ownership.
• The student can build up home equity that can be cashed out at the end of the four-year college period or held for longer-term appreciation.
• If a parent has more than one child attending college, the home can be used for as long as the family needs student housing or until the last child graduates from college.
• Depending upon the size of the home (2-3 bedrooms) the student can supplement his/her income by allowing for rental roommates
• Pets, which are not permitted in typical campus housing, can accompany your student to college and be a great comfort during lonely semesters away from home.

If you decide to have your student on the mortgage and deed you, can help the student establish credit prior to graduation?  Talk to your accountant and attorney to determine which method of ownership will work best for you and your student.  Some parents will choose to buy owner occupied property and others will choose to buy rental property for tax benefits.  There are many ways of holding title including creating a limited liability company.

Choosing your Massachusetts condominium or a single-family home for your student requires several choices.  If you choose a condominium, your student will have the advantage of no lawn care, snow shoveling or exterior maintenance.  The disadvantages of a condominiums include a Homeowner’s association fee that may be too high and loud stereos may bother neighbors.

A single-family residence might be easier to sell once your student has graduated.  However the student will be responsible for external maintenance tasks such as mowing, watering the lawn and snow shoveling.  Some neighborhoods may be less friendly to a group of students living there.  This is less likely to be a problem if the home purchased is close to the college and other homes are either owned or rented by students.

Disposing of the property once your student is ready to move on can be accomplished by converting your investment to a rental property or selling the residence on the open market or even exchanging it for a piece of real estate in another location.

The potential financial and educational benefits of buying a home for your college student to live in while away at college include:

• Possible appreciation in value
• Tax benefits
• Build up of equity over the time your student attends college, which can be used to finance a home when your student moves on to his/her first job.

Talk to your accountant, your attorney and your student about this investment option and then contact Harsch Associates or a top flight Realtor ® in your market area to begin your search for that perfect home away from home for your college bound child.

Real Estate Home Appreciation – Last 12 Months

Last Updated: 10/5/2009

The median home price, the point at which half of all homes are sold for more and half are sold for less, dropped in all regions but the West, as well. The price increased to $220,500 in the West, up from $217,900 in July, but it is still down 12.2 percent from last year.

The median price in the South dropped to $157,400 from $162,100 and is down 11 percent from August 2008.

In the Midwest, the price rose to $155,900 from $149,900 in July. In a year-over-year comparison, the price is off 10.4 percent.

The Northeast region’s median price declined the most of any area, dropping more than $10,000 to $241,100 from $251,500. Since last year, the price has fallen 10.5 percent.

Data Source: National Association of Realtors

Monthly Fluctuations in Median Home Prices by Region Overall

We have been receiving so many questions, I thought it might be a good time to weigh in on the First-Time Homebuyer issues, including the IRS tax credit and financing information.

IRS Tax Credit

It is always best to refer clients to the website www.irs.gov for information regarding their tax situation.  If they use the search box, and type in “Form 5405” they will get the most current and correct information for filing.  There is a “Ten Facts” page that can be printed and handed out, and I have been using that to answer questions as they come up.  As we all know, the deadline to close and record is November 30.  Borrowers should be under contract by October 20 to be sure they can close on time.  We have no information right now to indicate the desire of Congress to modify or extend this program, although hope remains high.

Financing

MassHousing has simplified their first-time homebuyer loan, with expanded income limits, lower rates and cheaper PMI.  They offer 30-year fixed-rate financing for first-time buyers with annual incomes up to $90,315 per household.  They will, in limited cases with excellent credit (720 score or higher), go to 100% financing, but the buyer must still have 3% of the purchase price of their own money – even if they are not putting it into the purchase.  For this reason, it is best to assume 97% when calculating your loan amount.

We continue to be a preferred MassHousing lender, and can provide additional information to buyers as needed.

PMI – Private Mortgage Insurance

As a credit union, we enjoy preferred rates from all PMI companies – up to 25% less than banks for the same loans.  We can often save buyers the equivalent of .25% in rate with lower PMI premiums.

We offer Job Loss Protection as an added benefit on all loans insured through MassHousing or Genworth PMI.  This coverage pays the borrower’s monthly payment for up to six months if they become unemployed and qualify for state unemployment insurance.  If you are a borrower who is afraid to buy due to the current job environment, we can help you. Ask us for more information.

This is still a historic time in our industry: LOW RATES, LOW PRICES, and AVAILABLE FUNDS TO LEND.

Maureen A. Phillips
Assistant Vice President
Greylock Federal Credit Union
mphillips@greylock.org

by Rana Cash with additional comments by Paul Harsch

Decreased home values makes it a difficult time to sell. It’s a buyer’s market, with home prices extraordinarily low. But sellers are not at a complete loss. Despite challenging times in real estate, homeowners can make some wise decisions along the way that will improve their chances of selling their home more quickly and getting more money for it. This important top-ten list was compiled by Rana Cash in an interview with Dana Bauguss, 2009 president elect of the Georgia Association of REALTORS®. The 11th item on the list is courtesy of Paul Harsch, President of Harsch Associates.

Lots of homeowners cry when they sell.  Sometimes it begins before the sign is stuck in the yard.  Why?  Sellers have developed relationships with their homes.  Homes hold treasured memories so it is no surprise for Sellers to become emotional.  However, some Sellers cry for another reason.  They sob because they are victims of the top ten selling mistakes and they can’t sell their home.

1. Sellers don’t hire a real professional. The biggest mistake sellers can make is they don’t hire a REALTOR® to professionally market their home, Bauguss said. Harsch adds that there are significant differences in levels of skill and commitment, even among REALTORS® which can yield major differences in results to the sellers. All real estate licensees are not the same. Only those who are members of the National Association of REALTORS® are properly called REALTORS®. No matter who you hire, as a seller you need to interview the agent for the “job” of selling your home and review marketing plans.  Selling (and buying) your home is one of the largest financial investments you’ll make.  Considering the small upside cost and the large downside risk, sellers need to hire a professional. For more insights in to what differentiates the “professional” from the rest, read the article on our blog comparing professionals with “hobbyists”.
2. Sellers price their home too high. Pricing a home is an art.  Of course market value is based on comparable sales but market movement, demand, location and condition are factors also.  If the home is overpriced then buyers won’t look at it or they will submit lowball offers.
3. The house isn’t ready for showing. Sellers need to listen to their real estate agent and do everything on the list to prepare the home to sell at least two weeks before the first showing.
4. The home is in bad condition. Sellers need to get their home ready to sell.  They need to do more than make the beds and clear the dishes out of the sink.  Minor repairs and quick fixes can boost the chance of a quick sale.  If buyers see deferred maintenance then they will wonder what else is wrong with the house.  So fix sticky doors, dripping faucets and torn screens. Harsch adds that even homes in poor condition will easily sell if priced accordingly.
5. Sellers need to get rid of the clutter. Throw out anything that is not needed and pack away most of your decorative items.  Make your closets as big as possible by packing out of season clothes.
6. The home needs deep cleaning. Make everything extra clean inside and out.  Clean fingerprints and appliances. Mop and wax until the house sparkles.  Tidy the yard and add flowers for color.  Make sure there is great curb appeal and an inviting front door.  A great first impression will make the buyers think the house has been maintained.
7. The house smells. The seller needs to get rid of all smells. Sellers are so comfortable with their homes they can’t smell the odors.  Clean the carpet and drapes and open the windows.
8. Sellers don’t stage their home. The house needs to be staged and depersonalized so the buyer looks at the house and not the seller’s belongings. View this professional staging PHOTO GALLERY.
9. Sellers hang around during showings, inspections or appraisals. When buyers are looking at your home, they want the seller gone! They need to talk about your house, talk to the inspector and be able to think out loud.  Sellers don’t need to chit chat with buyers or the selling agent.  This is a huge mistake!  You will tend to look desperate, needy or controlling.  Remember you have hired an expert for representation so you can and should stay out of the picture.  If you stay, this will cost you money.
10. Sellers refuse to drop the price. If the home has been on the market for more than 30 days without an offer, the seller should be prepared to lower the price. Of course setting a sensible market price to begin with is the first important step so if that was done at the outset, offers should have come in and been taken very seriously. High end homes, homes placed on the market from November to February  or properties with very unusual characteristics may not fit this “30 day rule”
11. Sellers fail to negotiate the first offer to conclusion. “The first buyer is usually the best.” These words of wisdom have been proven true time and time again but even more so in a soft market. Sellers who turn down the first buyer in hopes of someone who will pay more usually lead to disappointment. This problem is even more pronounced if the property was overpriced to begin with. Now the seller thinks the early offer is too low, is an indication that offers will get better as time goes on. Not so.

Selling a property is as much an art as it is business. Working with a real pro can and usually does make a major difference in the final outcome, in terms of the bottom line, ease of transition, fewer complications or surprises, and overall happiness at the end of the closing.

Please contact us at info@harschrealestate.com if you have any questions about this article’s contents or Berkshire real estate in general.

No matter your interests or the time of year, it’s just better here in the eclectic Berkshire Hills of Massachusetts. From Boston or New York, Newark or Norfolk, those with a taste for the arts, for antiques, for the country life without isolation head here …… and then tend to stay… three nights instead of two, a month instead of a week, a lifetime instead of a season. The Berkshires will do that to you.

“Easy to get to from anywhere in New England but hard to leave”, that should be our motto because no one gets tired of the variety of seasons, activities and sheer enjoyment of the region that runs from the Connecticut hills to the Green Mountains of Vermont, from the “hill towns” that divide this region from the Pioneer Valley to the east and the Taconic Ridge of NY to the west.

Here’s a quick rundown of the various communities that comprise The Berkshires:

• Top of county: Williamstown, the home of arguably the top small liberal arts college in the nation along with North Adams, now the home of MASSMOCA, the world’s largest museum of contemporary art
• Center and South: Pittsfield and the better known, highly attractive towns of Lenox, Stockbridge and Great Barrington
• Outlying hamlets fill the rest of south county: Monterey, Alford, Sandisfield, Tyringham and many lakes in the south which attract summer visitors for relaxation and recreation while the lush hills invite hiking and gazing

Goose Pond is one such haven, and it has provided many years of enjoyment for a couple from the eastern part of the state, he a musician and she a writer and illustrator of children’s books. You can read all about their home and their experience living in the Berkshires in a fabulous “Great Homes and Destinations” profile published yesterday in the New York Times.

Jan Brett and Joseph Hearne at Goose Pond. Photo: Chris Ramirez for The New York Times

In case you’re even more curious, come explore some other properties on Goose Pond that are for sale. We’d love to hear from you and better yet, help you find your perfect Berkshire retreat. It really is better in the Berkshires!

FOR IMMEDIATE RELEASE                                  

Contact:  Dave Traggorth
Mitchell Properties
617-542-6500

Interior Renderings Released for Cable Mills
Images provide detailed view of residence interiors when completed

WILLIAMSTOWN, MA (July 28, 2009) — Mitchell Properties, LLC, developer of the Cable Mills project and Harsch Associates, exclusive marketing representatives in Williamstown, announced the release of the interior renderings of Residence 302 at Cable Mills. The images provide scaled, three-dimensional views of the kitchen and of the living/dining rooms of Residence 302 and are a preview into what will be built inside these historic mill buildings along Water Street.

“People have loved the exterior rendering we have; showing the building’s relationship to the river, the landscaping, and how meticulously the masonry will be restored, so we wanted to give a glimpse into the equally impressive interiors that are planned,” said Dave Traggorth, project manager for Cable Mills who announced the release via Twitter, the project website www.cablemills.com, and the Harsch website www.harschrealestate.com.

Jim Alexander, principal of Finegold Alexander + Associates, and architect for Cable Mills along with notable area projects such as the Mohawk Theater in North Adams was pleased with the resulting images that are based on his design. “It can be difficult at this stage in the process for some buyers to imagine how historic mill buildings with 14-16’ ceilings, exposed brick and beam, and oversized windows create wonderful living spaces, but these images show how years of experience with these types of buildings and hundreds of hours of design time can yield exceptionally comfortable, beautiful living spaces that people could call ‘home’ and will enjoy for years to come.” 

Tom Greenwood, of Sofield Studios in New York and Berkshire native from New Ashford, was commissioned by Mitchell Properties to complete the images in a collaborative process that took several weeks. “Each component of these images – from the stainless steel appliances and granite countertops in the kitchen to the exposed brick walls and oversized windows in the living and dining rooms was based on the actual construction drawings and specifications developed by FA+A and Mitchell Properties.” Tom went on to explain that in order to make the image as realistic as possible the he obtained photographs taken by Paul Harsch of the brickwork in the actual space that will become Residence 302, and used the images as the basis for the exposed brick in the rendering. 

Residence 302 is one of 30 residences currently available for purchase at Cable Mills. Residences start in the $250’s and Residence 302 with 2 bedrooms and 2 bath is offered by Harsch Associates for $449,900. Kevin White, Director of Sales for Cable Mills said that “while each residence is unique, every one has similarly large windows, tall ceilings, and quality finishes, allowing people to imagine how their particular residence will look when completed even if it is not Residence 302.”

Mitchell Properties has commissioned several additional images from Sofield Studios. “Natural light, exposed brick, oversized windows, and tall ceilings are the perfect canvas for any style — be it contemporary or more traditional, so we look forward to showing some of the different options in these magnificent spaces.” said Paul Harsch of Harsch Associates. 

Traggorth said that the team has been busy and responding to over 400 inquiries from people living in the Berkshires and across the country, providing tours of the building, and preparing for the start of construction. “We’re excited to now have the complete picture – between the tours, exterior renderings, and interior renderings, our efforts have been focused on showing how Cable Mills will become a fantastic place to live.” But more than anything he said, “we look forward to making it all a reality.” He noted that initial masonry restoration and stabilization work is scheduled to begin within weeks. 

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About Cable Mills
The Cable Mills project is the renovation and rehabilitation of the former General Cable Industries facility by Mitchell Properties LLC into a community of luxury condominiums and townhouses along the Green River on Water Street in downtown Williamstown. Occupancy of the first phase of units is planned for the Fall of 2010. For more information visit the project’s website www.cablemills.com  

About Mitchell Properties
Mitchell Properties is a Boston based real estate development company owned by Bart Mitchell, who graduated from Williams with the Class of 1980. After successfully completing numerous Boston residential projects, Mitchell Properties has developed an expertise in residential and mixed-use projects, including new construction and adaptive reuse of historic structures.  Mitchell Properties has gained a reputation for creating highly successful residential communities with an emphasis on unique design, quality construction, green living, beautiful landscaping, stylish interior finishes, and exceptional management.

About Harsch Associates
Harsch Associates, established in 1979, has been involved in a wide variety of projects within the county including land, commercial and residential sales and development. Paul Harsch, himself a 1969 graduate of Williams College and president of the firm has 34 years of real estate experience and Kevin White, the head of the marketing team for Cable Mills, has specialized in his career in sales of new condominium and town home developments, the most recent of which was an exclusive 6,000 acre golf course community in Colorado. For more information visit www.harschrealestate.com

About Finegold Alexander + Associates
Established in 1961, Boston-based architectural firm, Finegold Alexander + Associates provides clients with creative and innovative solutions to contemporary design opportunities.  The firm maintains high standards for design, construction and environmental sustainability. In its relationships with clients, consultants and its employee-community, the firm creates an environment which supports the belief that architecture can elevate the human spirit. For more information visit http://www.faainc.com/

Harsch Associates has been drawing visitors by the hundreds and thousands to its latest feature, live video tours of homes in the Berkshires, Williamstown, North Adams, Vermont towns, Hancock, Lanesboro, and soon in New York. The videos show homes as well as Berkshire land offerings. Ironwood features a home with indoor riding ring and magnificent stables, Sweet Farm features 12 lots in an 18 lot subdivision and Candlewood Dr. is a typical Williamstown neighborhood Cape style home at an affordable price. There is the Victorian Lady in North Adams, home of MassMoca and soon Harsch will feature a live video in the production phase, of Cable Mills Condominiums, with 30 units now being offered in preconstruction marketing.

The Harsch Associates website has been earning accolades and outstanding visitor traffic since it first was created 11 ½ years ago. It is now in its third generation and growing being one of the first and among the few and only sites to be able to offer every single listing in the Berkshires as well as neighboring Vermont MLS. The agency also serves neighboring NY state.

The Harsch Associates web site attracts thousands of visitors a month. A recently completed indendent research firm had this to say about the Harsch site:

A website grade of 89/100 for harschrealestate.com means that of the hundreds of thousands of websites that have previously been evaluated, our algorithm has calculated that this site scores higher than 89% of them in terms of its marketing effectiveness. The algorithm uses a proprietary blend of over 50 different variables, including search engine data, website structure, approximate traffic, site performance, and others.

The website harschrealestate.com ranks 132,785 of the 1,165,767 websites that have been ranked so far.

 The Harsch website ranked 89 while its closest competitors’ sites ranked 42 and 32 respectively. “We are totally dedicated to a constant upgrade and enhancement of all of our marketing strategies from print media to the internet in order to give our clients the very latest and greatest advantages in reaching the buying and selling market today. Catching the attention of more buyers and sellers of real estate is the edge we offer. From day one of my career some 35 years ago this September, I have sought to do a number of things better than anyone else in my market and among those has been pursuing my education and skills in real estate and another has been to be the top marketer which today means being on top of the net and the tools available to us there. It is very gratifying to see the facts prove this out. Having a site that is twice as effective as our next closest competitor makes me feel very reassured we are on top of our game and yet we are constantly striving to improve our site, day in and day out.

There are plenty of other ways in which we are considered leaders in our field. One of those is by offering our clients a real set of choices in the forms of representation, from buyer and seller agency to the newest option in MA for which I myself helped create the legislation that was adopted just a few years ago, Facilitation also called Transaction Brokerage.

I pledge to always strive to stay at the forefront of the changes and advancements and enhancements in the real estate profession. That is my nature and that is what our most discerning clients expect and the rest benefit from.

Paul Harsch