The Massachusetts State Sanitary Code: Everything A Landlord Wanted to Know But Was Afraid To Ask

The Massachusetts State Sanitary Code governs the minimal standards of fitness and conditions for human habitation of rental occupancy of property. Unfortunately, most landlords become familiar with the lengthy code only after tenants or the local Board of Health cites them for code violations. As a landlord-tenant attorney, I’ve created this comprehensive summary of the Massachusetts State Sanitary Code. Mind you, this does not cover every single provision,  just the important ones, in my opinion. Keep this handy guide on your nightstands in case you have insomnia! Seriously, this is important information for all rental property owners in Massachusetts.


The Massachusetts State Sanitary Code is found at 105 Code of Massachusetts Regulations 410, which can be downloaded by clicking here. The Sanitary Code applies to all rental properties in Massachusetts including owner-occupied multi-families, rooming houses and temporary housing. The only exceptions are dwellings located on a campground and civil defense shelters.

Kitchen and Bathroom Requirements

The Code provides that every rental unit where common cooking facilities are provided shall contain a kitchen sink, a stove and oven and space and proper facilities for the installation of a refrigerator. Each unit must include at least one toilet, one washbasin (which cannot be the kitchen sink) and one bathtub or shower in a separate bathroom. Privies and chemical toilets are prohibited except with Board of Health permission.

Potable Water

Landlords must provide “a supply of potable water sufficient in quantity and pressure to meet the ordinary needs of the occupant” either connected to town/city water or private well with Board of Health approval. The landlord may charge tenants for actual water usage if separately assessed and metered. Hot water must also be provided of not less than 110°F and no more than 130°F.


Landlords must provide for adequate heating in every habitable room of a rental unit including bathrooms. Portable space heaters and similar equipment are prohibited. Heating must be provided to no less than 68°F between 7AM and 11PM and at least 64°F between 11PM and 7AM, except between June 15 and September 15.

Natural Light and Lighting Fixtures

The Code requires at least one window in all rooms except the kitchen if less than 70 s.f. Lighting fixtures must be provided in all bathrooms. Two outlets must be provided in every habitable room, and sufficient lighting provided in all hallways, foyers, laundry rooms and the like. Buildings over ten units must have auxiliary emergency lighting. Screens must be provided for all windows on the first floor.

Maintenance Obligations

An oft-litigated area, the Code provides for maintenance obligations for both landlord and tenant. Landlords must maintain and repair whatever appliances he has installed in the unit. If a tenant has paid for and installed an appliance himself, however, he is responsible for maintaining it. Tenants are also responsible for the general cleanliness of toilets, sinks, showers, bathtubs, and kitchen appliances. So when the tenant claims there is mold in the bathroom, the landlord can argue that the tenant’s lack of cleanliness is the cause. Landlords must also exterminate any pest, insect or rodent infestation.

Asbestos and Lead Paint Materials

If there is asbestos material in the unit, the landlord must keep it in good repair, free of all defects, cracks and tears which would allow for the release of asbestos dust. Due to the liability exposure, it’s a good idea for any landlord to remove all asbestos materials. Lead paint is absolutely prohibited where children under 6 are occupying. See my previous posts on the Lead Paint Law for more info on this complex area.

Utility Metering

Owners must provide electric and gas service to tenants unless they are separately metered and billed to the unit and the lease provides for same. Separate water metering is permissible so long as the landlord gets written approval from the local Board of Health and complies with the metering requirements of General Laws chapter 186, section 22. For homes heated with oil, the owner must provide the oil unless it is provided through a separate oil tank servicing only that dwelling unit.

Minimum Square Footage

* 150 s.f. for the first occupant, and no less than 100 s.f. for each additional occupant
* Bedrooms — 70 s.f. for first occupant, 50 s.f. for each additional occupant
All ceilings must be no less than 7 feet.

Egress/Snow and Ice Removal

Property owners must keep all means of egress free from obstruction. As for the removal of snow and ice, the Code provides that the owner shall maintain all means of egress at all times in a safe, operable condition and shall keep all exterior stairways, fire escapes, egress balconies and bridges free of snow and ice. A landlord may require the tenant be responsible for snow and ice remove only where a dwelling has an independent means of egress, not shared with other occupants, and a written lease provides for same. Otherwise, landlords are responsible for snow and ice removal. Even if the tenant is responsible, the landlord could still face liability for slip and falls on snow and ice under recent Massachusetts case law.


Owners must install locks for every door of a dwelling unit capable of being secured from unlawful entry. The main entry door of a three unit dwelling or more must be installed with a automatic locking mechanism.

Smoke/CO2 Detectors

Smoke and carbon monoxide detectors must be installed in accordance with the Mass. Fire Code.


Owners must provide safe handrails for every stairway, and a wall or guardrail on every open side of a stairway no less than 30 inches in height. For porches and balconies, a wall or guardrail at least 36 inches high must be provided. Between all guardrails and handrails, balusters at intervals of no more than 6 inches for pre-1997 construction, and at 4.5 inches for post 1997 construction must be provided.

Inspections and Code Violations

The Code provides that the local Board of Health or Inspector can inspect any unit upon the  oral or written complaint of an occupant. Inspections are supposed to take place within 24 hours of the complaint, but that rarely happens. The inspector will prepare a code violation form. Serious violations such as failure to provide heat or water must be corrected within 12 hours. Less serious violations should be corrected within 5 – 30 days depending on the type of violation. Violators have a right to a hearing before the board of health to contest any code violations.

Code violations are criminal proceedings and should not be ignored. Penalties can result in $500/day fines and even condemnation of the premises.




Analyzing Real Estate Market Data……Properly

         June 6, 2012

I had several of my Facebook “fans” message me about my latest post and accompanying article relating to bidding wars. Some of them responded in utter disbelief. So, it got me thinking to just how many times in the course of 6 years that I have explained the difference between the “National” data and the “Local” data. I found myself doing it repeatedly at the beginning of 2012 when people asked me how business was and I responded by letting them know that I had my best year EVER in 2011. I even won 2 prestigious awards and a trip to Miami. They would nod and smile politely and enthusiastically congratulate me. I knew what they were thinking, “Is she delusional?” That is the perfect example of National versus Local market data not lining up. Both can and often do paint a very different picture of the real estate market I practice in, here in Greater Boston. So, the bottom line you should receive after reading this post is this: it is crucial to understand and analyze the market that you are buying and selling in “locally” and it is nice to have an understanding of the National data. The following article agrees:

National housing data headlines are very often misleading – at best. At their worst, they drill into one of the harder to measure, but equally important factors impacting the nation’s real estate markets: consumer psychology. In fact, if not for the reality that 99.9% of consumers buy a home for the sake of owning a home, improving their lifestyle and growing their families – three things you can’t measure with numbers – I’d be willing to say that national housing data often does more damage to market conditions than good.

Last week, we saw a classic example of this type of dubious headline shootout: The S&P/Case-Shiller Home Price Indices came out, indicating that home prices fell nearly 3% in the first quarter this year. This probably had some people scratching their heads if they were paying attention to the report from NAR released the week before noting that home prices continued to trend upward in April, climbing 10% compared to the same month a year before.

Upon closer look, it’s easy to point out that the S&P/Case-Shiller numbers are quarterly, while NAR’s numbers are monthly. It’s also important to point out how each report is measuring price changes. For instance, NAR measures existing homes that sell each month and tracks the changes in median values, while S&P/Case-Shiller looks at the same home and measures how much it recently sold for versus how much it sold for the last time it changed owners.

These are two very different takes on data that gets lumped into the same thing in a news headline: home values. As we all know, not many people pay much attention past that headline.

In my experience, many consumers aren’t that concerned with national statistics. However, paranoia and uncertainty about the market ensues after the last downfall and more people may be watching stuff like this than we think.

It’s our job as real estate professionals to pay attention to these data headline discrepancies and proactively help consumers sort out what these numbers mean.

It’s our job to reinforce the realities of our local markets. While these national data are painting two stories – one slow but steady recovery, and one that’s not yet started recovering lost values – your local market may very well be tipping back into a seller’s market. Indeed, some markets are back to multiple offer situations and are experiencing tight inventory, making it tougher to be a buyer than it has been generally in recent years.

Should we even pay attention to national housing data? Yes, to the extent that it’s news and news travels. But I think we should pay even more attention to what’s being left out of these news stories, and be prepared to help others understand.

Did Your Town Make The List?

Best Places to Live 2012

Boston Magazine’s annual real estate guide to finding your happy place.


Because it’s a suburban town with a global vibe Median home price: $519,500, One-year change: +5% This   community northwest of the city is earning a reputation for diversity that’s on par with Lexington’s. (In fact, there’s an actual rivalry  between the two towns: Last April, Acton-Boxborough Regional High’s math   team bested the Lexington squad by one point in a nail-biting state  meet.) Thanks to the area’s vibrant Indian and Chinese populations, kids   get an international experience that extends beyond school hours. On  Sundays, children taking Chinese lessons fill the junior high.  Instructors from Angel Performing Arts lead 80 girls, ages 5 to 15, in  Chinese folk-dance lessons at Exchange Hall. And at the high school, the   student organization Asha (“hope” in Hindi) promotes South Asian  culture with activities like food festivals, and is raising money to  build a school in Rajasthan, India.

Boston’s Leather District

Because it’s got downtown style with a small-town soul Median condo price: $605,000*, One-year change: +21% A   strong sense of community pervades this compact, nine-square-block  warren of old office buildings and factories near the Financial District   and Chinatown. Five-year resident Tim Cushman, who, along with his  wife, Nancy, owns the sushi temple O Ya, says they bump into familiar  faces all the time, especially at the nearby Dewey Square farmers’  market. “We have a lot of neighbors who come into the restaurant,”  Cushman says. The neighborhood is also maturing: Social media startups, ad agencies, and other hip businesses have put down roots in the area  and formed a tight-knit group, even banding together for a block party  last fall. And although luxury loft construction screeched to a halt  when the economy tanked, things are looking up. Current offerings  include both smart bargains (a one-bedroom loft for under $400,000) and high-end finds (a $1.3 million terrace penthouse). Hudson Group North  America also plans to break ground later this year on a 25-story  high-end apartment tower where the decrepit Dainty Dot Hosiery building stands at the corner of Kingston and Essex streets. Expect the project,   which is on the outskirts of the neighborhood, to further enliven the area and increase foot traffic. *  Data  is  for  the  02111  zip  code, which  includes  parts  of  Chinatown.

East Boston

Because it’s an adventurous eater’s paradise Median condo price: $227,500, One-year change: +7% In   2009, chef Michael Serpa of the North End’s Neptune Oyster decided to jump on a gut-renovated two-family near Orient Heights. The price? Just   $340,000. Two and a half years later, he couldn’t be happier with the choice. Besides the eight-minute commute to downtown through the old  harbor tunnels, Serpa and his wife, Lina Velez, love Eastie for its  inexpensive global comfort food like Peruvian ceviche, Colombian tongue stew, and Salvadoran pupusas. (The Mexican fare at Angela’s Café is  legendary.) Mayor Menino is certainly betting on East Boston, too,  having recently announced plans for a series of infrastructure  improvements to lure private developers to the harbor.


Because it’s an overlooked waterfront retreat Median home price: $299,900, One-year change: +13% In places like Heaven Heights and Bliss Road, houses tucked into the nooks and crannies of Long Pond’s sparkling shoreline start at $200,000 and go up to $2 million. (It’s rumored that John Travolta looked there.) The draw? The waterfront vistas afforded by lake living…minus the beach-town pricing. Real estate agent Tracy Shand of Jack Conway & Company moved to town with her husband after losing out on properties north of Boston. They now have 101 feet of pond frontage. Lakeville does have a sprinkling of amenities — the Cottage Day Spa, Somethin’s Brewing Book Café — but the community revolves around the pond, where locals can putter up to the dock at St. John Neumann’s Church for mass on Sunday mornings.


Because sustainability is a way of life Median home price: $335,000, One-year change: +1% This   southwest suburb has taken the eco-conscious cause to heart.  Massachusetts recently designated Medway an official “green community,” providing grants to install low-energy lighting in municipal buildings and set up residents with rainwater collection barrels. Last May, the  first shares of organic crops — heirloom tomatoes, zucchini, fresh-cut  flowers — were sold from the Medway Community Farm (local fourth-graders   helped plant the seeds) on town-owned land. The high school generates some of its electricity via solar panels, and the middle school is being  retrofitted for them, too. Even commercial developers are getting in on  the act. One new subdivision near the center of town features  geothermal air systems. “Green is good” here, says Paul Yorkis, who is  developing 18 energy-saving townhouses in West Medway. Mother Nature  agrees.


Because of one ridiculously great grocery store Median home price: $367,000, One-year change: +4% We   tried to stay within the I-495 loop for this package. We really did.  But if there’s one thing we’ll endure a longer commute for, it’s the new   mega grocery store Wegmans. Northborough denizens have flipped for the   New York company’s first New England outpost, a shiny  138,000-square-foot space teeming with gourmet goodies. “I almost want  to cry when I walk by the bakery,” town resident Shawn Gillespie says of   the store’s appeal. Home cooks stock up on shallot-thyme butter, red  Cerignola olives, and prepared foods galore — and shop the cavernous  liquor department. Real estate agent Karen Scopetski, who says a large  number of Northborough residents commute to nearby EMC or to Boston, can   show you $275,000 homes in the Northgate neighborhood, $400,000  residences in Indian Meadow, or $700,000 McMansions in Brigham Woods.


Because the new high school is a high-tech masterpiece Median home price: $264,500, One-year change: -3% This   town, where you can get a 1,600-square-foot house for less than  $275,000, is a savvy shopper’s dream — and it’ll be even more so when  Plymouth North High School opens in September. Principal Kathleen  McSweeney says the space will feature a robot-engineering lab,  building-wide WiFi, electric-car chargers in the parking lot, and $6,500   worth of gadgets for every classroom, including interactive whiteboards  and Bose speakers. (There will also be sparkling facilities for the  sports teams.) And for parents? Plymouth offers a quaint downtown and  the Colony Place outdoor mall.


Because it’s about to get an extreme makeover Median home price: $299,950, One-year change: -5% With   $1.6 billion in planned upgrades to a 20-block area, Quincy is a city on the move. Once infrastructure improvements are completed next year, Street-Works Development and the Beal Companies are slated to begin  building a downtown department store, farmers’ market, up to 1,400  residences, and more. The project’s buzz may help explain the spurt in  winter sales activity around Quincy — 221 single-family homes and condos   were sold or went under contract between November and mid-February,  compared with 140 during the same period last year.


Because of the bustling harbor Median home price: $437,000, One-year change: +2% A    wave of development on Scituate Harbor, including retail, office, and    condo projects, has energized the waterfront. “All of a sudden, it’s   lively,” says Realtor David Drinkwater. On Front Street, you’ll find  Wishbones pet boutique, food and gift shop Roman Table, the rehabbed   cinema, and seafood eatery Oro. In 2009 three local families reopened   the 29-room Inn at Scituate Harbor, and its Dogwatch bar attracts   weekend crowds


Because it’s the new Cambridge Median condo price: $358,000, One-year change: +2% Consider    it the feistier younger sister to the People’s Republic: close to   Boston and densely populated, but edgier and more artsy than its   sibling. While the ’Ville’s Open Studios draw culture-seeking crowds   from all over in the spring, you’ll find exhibits throughout the year.  There are the studios in the Arts at the Armory and Brickbottom   buildings, and the shows at the Washington Street Art Center. The   Artisan’s Asylum craft center, with its classes on metalworking, home   brewing, and, uh, robot building has grown so popular it had to be moved    to a bigger space near Union Square — which, generally speaking, is  where creative types hang their hats. That’s no surprise, given the   neighborhood’s coffee shops, music venues, and the locavore-leaning   Sherman Market. You’ll also find plenty of artistic folk in the   ungentrified outpost of East Somerville (near Sullivan Square) and in   pockets between Highland Avenue and Winter Hill. On the whole, prices   are on the upswing in the city, but Ellen Friedman of Keller Williams   Realty says there’s plenty in the $300,000 range, making Somerville a   good option for first-time buyers — who will stand to profit if and when    the city’s many planned municipal projects begin to bear fruit. In   addition to the proposed Green Line extension, which would add five T   stops, city planners have offered a fresh retail vision for Assembly   Square, where new residences are already going up. And Alderman Tony   Lafuente has plans to invigorate Winter Hill’s tired but well-trod   commercial area.


Because the great outdoors are your backyard Median home price: $415,700, One-year change: -4% Most   people know only one thing about Topsfield: the annual fall fair, which  features piglet races and giant pumpkins. But this rural community of  beautiful old homes and horse farms offers more than just a slice of  Americana — it’s also a recreational hub for folks of all ages.  Topsfield recently completed a two-mile rail trail that’s part of the  proposed 28-mile Border to Boston Trail, which will eventually run from  Peabody to Salisbury. Then there are the large swaths of Bradley Palmer  State Park and the Ipswich Wildlife Sanctuary that fall within town  lines. Baby boomers can park their bikes at the budding 55-plus English  Commons community (customized town homes start around $650,000), which  sits on 69 serene acres near the Putnamville Reservoir. But  opportunities abound for buyers of all ages: Since 2006, prices here  have plunged by 25 percent.


Because it offers rural charm and big-city amenities Median home price: $525,000, One-year change: -1% If   you want to leave the Back Bay for an idyllic suburb but are terrified   of giving up your Apple store, consider Westwood. Retail addicts get  their fix just across the town line at Dedham’s open-air Legacy Place,  which includes Stellabella Toys, Whole Foods, Anthropologie, and more.  Yet pretty Westwood (population under 15,000) retains its quaint  character. And it’s getting some upgrades: a new library, new luxury  senior housing, and a recently expanded middle school to accommodate a  baby boomlet. Neighborhoods like Islington (prices start under $300,000)   and the Clapboardtree Street area ($700,000 to $1.2 million) feature  tasteful postwar housing stock, while Stevens Farm ($2 million and  up)offers newer construction, says agent Barbara Shea. And with an  Amtrak station and two commuter-rail stops, those who just can’t shake  their downtown-shopping habit can get back in a flash.


Because your commute could be a 25-minute cruise Median home price: $290,500, One-year change: -10% When   Winthrop began running a $6 weekday shuttle ferry to Rowes Wharf in  downtown Boston last year, it opened up a world of possibilities for  commuters in this ’burb northeast of the city (bonus points for free  parking near the dock). But the ferry operated from just May to October,   leaving residents out of luck during the winter. Thankfully, town  manager James McKenna hopes to offer year-round service aboard a  town-owned vessel in the near future. Winthrop has also secured state  funding for a walkway and bike trail that will run along the harbor.  Bargain Capes, ranches, and Victorians abound on this 1.6-square-mile  peninsula, where the median price has dropped 20 percent since 2006 —  and every house is near the water.


Because it’s the little town that could Median home price: $390,000, One-year change: +13% Many   know Wrentham primarily for its outlets and proximity to Gillette  Stadium. But its assets go far beyond Banana Republic and Tom Brady. For   starters, there’s the top-notch extracurriculars at King Philip  Regional High School, which completed a reconstruction in 2007. The  blockbuster music program brings home top awards. Last year, the  football team made it to the state semifinals, and the girls’ softball  squad won its second consecutive state championship. (Paul Schaefer,  district director of finance and operations, credits the surge in talent   to a bump in enrollment.) Home values are on the upswing, too: The  median price jumped $45,000 from 2010 to 2011, and with the recent  approval of the Fox Run subdivision (which will start in the high  $400,000s), the trend is likely to continue.


Boston Makes the Top 10 Best Cities List for Borrowers!

Top 10 Best Cities for Borrowers
Some cities are better than others for borrowers.

The best cities have the lowest percentage of foreclosures and delinquencies, including a low percentage of bank-owned homes. In most of the cities on this best list, home prices are actually rising.

This kind of solid housing market motivates banks to offer lower rates and better terms.

Here are the 10 cities that Forbes ranks as the best for borrowers:
1. Kansas City, Mo.
2. Houston
3. Dallas
4. Virginia Beach, Va.
5. San Antonio, Texas
6. Boston
7. Pittsburgh
8. Denver
9. Seattle
10. Portland, Ore.

Source: Forbes, Francesca Levy (03/22/2010)

February Home Sales Are Up!!!

WALTHAM, Mass. – March 31, 2010 – The Massachusetts Association of REALTORS® (MAR) reported today that median prices of single-family homes were up 7.7 percent compared to February 2009 while condominiums were up 12.8 percent compared to the same time last year. Home sales have now increased for eight straight months and were up 14.3 percent compared to the same time last year while condominium sales were up 14.8 percent.

February 2010 Housing Numbers Podcast with

MAR President Kevin Sears

“February was another good month for the Massachusetts real estate market as momentum continues to build toward more normal market levels across the state,” said 2010 MAR President Kevin Sears, broker/co-owner of Sears Real Estate in Springfield. “While more homes for sale would help ensure prices stabilizing, it was a positive sign that February had the smallest percentage drop since year-over-year inventory declines started 23 months ago.”

There were 1,882 detached single-family homes sold this February, a 14.3 percent increase from the 1,647 homes sold the same time last year. On a month-to-month basis, home sales were down less than one percent from 1,897 homes sold this past January.

The median selling price for single-family homes in February was $271,950, an increase of 7.7 percent compared to $252,500 in February 2009. This is the third straight month of year-over-year gains. On a month-to-month basis, the February median selling price was down 9.4 percent from $300,000 in January 2010.

The February condominium market was up 14.8 percent compared to the same time last year (from 691 units sold in 2009 to 793 units sold in 2010). On a month-to-month basis, condominium sales were down 6.6 percent compared to the 849 units sold this past January.

Condominium median selling prices in February were up 12.8 percent from $213,250 in 2009 to $240,500 in February 2010. On a month-to-month basis, the median selling price of a condominium was down 6.8 percent from a January 2010 median of $257,980.

Inventory and Days on Market:
The inventory of single-family homes as of February 28, 2010 decreased 3.0 percent from February 2009 (25,317 listings in 2009 to 24,434 listings in 2010) which translates into 13.0 months of supply in February 2010. This is down from 15.4 months of supply last year and up from 12 months in January 2010. February supply was at its lowest level since February 2002 and down 32 percent from the February peak of 35,907 homes in 2006. This is the 23rd straight month that inventory has gone down compared to the previous year.

The condominium market saw February inventory decrease by 6 percent from last year (11,028 listings in 2009 to 10,362 listings in 2010), which translates into 13.1 months of supply, which is down from 16 months in February 2009 and up from 11.1 months this past January. This is the 23rd straight month that inventory has gone down compared to the previous year.

Detached single-family homes stayed on the market an average of 137 days in February 2010 compared to an average of 153 days in February 2009, while condos stayed on the market an average of 142 days, down from an average of 187 days in February 2009. On a month-to-month basis, days on market for single-family homes were up from 130 days and condos were down from 144 days in January.

About the Massachusetts Association of REALTORS®:
Organized in 1924, the Massachusetts Association of REALTORS® is a professional trade organization with more than 20,000 members. The term REALTOR® is registered as the exclusive designation of members of the National Association of REALTORS® who subscribe to a strict code of ethics and enjoy continuing education programs.

September Existing-Home Sales Show Another Strong Gain

Washington, October 25, 2010

Existing-home sales rose again in September, affirming that a sales recovery has begun, according to the National Association of Realtors®.

Existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, jumped 10.0 percent to a seasonally adjusted annual rate of 4.53 million in September from a downwardly revised 4.12 million in August, but remain 19.1 percent below the 5.60 million-unit pace in September 2009 when first-time buyers were ramping up in advance of the initial deadline for the tax credit last November.

Lawrence Yun, NAR chief economist, said the housing market is in the early stages of recovery. “A housing recovery is taking place but will be choppy at times depending on the duration and impact of a foreclosure moratorium. But the overall direction should be a gradual rising trend in home sales with buyers responding to historically low mortgage interest rates and very favorable affordability conditions,” he said.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.35 percent in September from 4.43 percent in August; the rate was 5.06 percent in September 2009.

The national median existing-home price2 for all housing types was $171,700 in September, which is 2.4 percent below a year ago. Distressed homes3 accounted for 35 percent of sales in September compared with 34 percent in August; they were 29 percent in September 2009.

NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz., said opportunities abound in the current market. “A decade ago, mortgage rates were almost double what they are today, and they’re about one-and-a-half percentage points lower than the peak of the housing boom in 2005,” she said. “In addition, home prices are running about 22 percent less than five years ago when they were bid up by the biggest housing rush on record.”

To illustrate the jump in housing affordability, the median monthly mortgage payment for a recently purchased home is several hundred dollars less than it was five years ago. “In fact, the median monthly mortgage payment in many areas is less than people are paying for rent,” Golder said.

Housing affordability conditions today are 60 percentage points higher than during the housing boom, so it has become a very strong buyers’ market, especially for families with long-term plans. “The savings today’s buyers are receiving are not a one-time benefit. Buyers with fixed-rate mortgages will save money every year they are living in their home – this is truly an example of how homeownership builds wealth over the long term,” Golder added.

Total housing inventory at the end of September fell 1.9 percent to 4.04 million existing homes available for sale, which represents a 10.7-month supply4 at the current sales pace, down from a 12.0-month supply in August. Raw unsold inventory is 11.7 percent below the record of 4.58 million in July 2008.

“Vacant homes and homes where mortgages have not been paid for an extended number of months need to be cleared from the market as quickly as possible, with a new set of buyers helping the recovery along a healthy path,” Yun said. “Inventory remains elevated and continues to favor buyers over sellers. A normal seasonal decline in inventory is expected through the upcoming months.”

A parallel NAR practitioner survey shows first-time buyers purchased 32 percent of homes in September, almost unchanged from 31 percent in August. Investors were at an 18 percent market share in September, down from 21 percent in August; the balance of purchases were by repeat buyers. All-cash sales were at 29 percent in September compared with 28 percent in August.

Single-family home sales increased 10.0 percent to a seasonally adjusted annual rate of 3.97 million in September from a pace of 3.61 million in August, but are 19.5 percent below the 4.93 million level in September 2009. The median existing single-family home price was $172,600 in September, down 1.9 percent from a year ago.

Existing condominium and co-op sales rose 9.8 percent to a seasonally adjusted annual rate of 560,000 in September from 510,000 in August, but are 16.2 percent lower than the 668,000-unit level one year ago. The median existing condo price5 was $165,400 in September, down 6.2 percent from September 2009.

Regionally, existing-home sales in the Northeast increased 10.1 percent to an annual pace of 760,000 in September but are 20.8 percent below September 2009. The median price in the Northeast was $239,200, which is 1.4 percent below a year ago.

Existing-home sales in the Midwest jumped 14.5 percent in September to a level of 950,000 but are 26.4 percent below a year ago. The median price in the Midwest was $139,700, down 5.2 percent from September 2009.

In the South, existing-home sales rose 10.6 percent to an annual pace of 1.77 million in September but are 14.9 percent lower than September 2009. The median price in the South was $149,500, down 2.6 percent from a year ago.

Existing-home sales in the West increased 5.0 percent to an annual level of 1.05 million in September but are 16.7 percent below a year ago. The median price in the West was $213,600, which is 4.9 percent lower than September 2009.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

NOTE: NAR also tracks monthly comparisons of existing single-family home sales and median prices for 20 select metropolitan statistical areas, which is posted with other tables at: For information on areas not included in the report, please contact the local association of Realtors®.

1Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 to 90 percent of total home sales, are based on a much larger sample – more than 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

2The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.

3Distressed sales, first-time buyer and investor data are from a survey for the Realtors® Confidence Index, scheduled to be posted November 5.

4Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, condos were measured quarterly while single-family sales accounted for more than 90 percent of transactions).

5Because there is a concentration of condos in high-cost metro areas, the national median condo price generally is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.

Mortgage Rates Continue Record Slide

Freddie Mac reports that rates on fixed mortgages again fell to their lowest levels in decades this past week, with the average interest on 15-year loans dipping to 3.57 percent from 3.63 percent a week earlier, and the average interest for 30-year loans sliding to 4.17 percent from 4.24 percent. That is the lowest since 1971.

The impact of the favorable borrowing costs is being muted somewhat, however, by a high rate of joblessness, foreclosures, and tight credit.

Source: Boston Globe (11/12/10)

Fed Opens the Year with a Plea for Housing

2012 is going to be a big political year for housing – and not just due to the presidential elections. The Federal Reserve has already kicked off the year by stepping into delicate political territory with its letter and white paper outlining U.S. housing problems to the congressional committees in charge of banking and financial services.

The move was quite surprising, given that the Fed was not given a formal request. The actual letter begins with: “Restoring the health of the housing market is a necessary part of a broader strategy for economic recovery.” The Fed’s opening argument is that the ongoing problems in the U.S. housing market continue to impede the nation’s economic recovery.

It’s clear the Fed wants to make housing the centerpiece of the national economic debate in 2012.

The white paper then goes on to outline a framework for possible policy changes that could help boost the housing economy and help struggling homeowners. Four of the possibilities outlined are:

Help more underwater homeowners refinance at lower rates. This policy is an old idea that was already poorly implemented under HARP in 2009. It was meant to help holders of the 8 million mortgages owned by Fannie Mae and Freddie Mac that carry an interest rate above 6%. It hopes to extend refinance possibilities to those who’ve not been able to take advantage due to inadequate or no equity, spotty credit or tightened lending rules.

New rules for HARP, however, could open it up to millions more households in need.

Large-scale principal reduction initiative. Lowering the amount of money that mortgage holders owe on their loan principal would drastically change the financial landscape for millions of families. The Fed notes in its paper that 12 million mortgages are underwater now, adding to about $700 billion in negative home equity.

Tackling this deficit would put many homeowners back in an ownership situation that makes financial sense given the current market condition and economy.

Convert vacant government-owned foreclosed homes into affordable rentals. This makes a ton of sense. The two housing finance agencies Fannie and Freddie own more than 230,000 foreclosed homes. Why not set up government programs that turn this unsold inventory into much-needed rental housing (a market that’s seen a rise in demand in the wake of the housing slowdown)?

Establish fair consumer protections for mortgage servicing. The Fed and others want to add a layer of consumer protection into the mortgage servicing market that previously was not there. Mortgage services currently have no fiduciary duty to protect consumers from errors and omissions in the servicing process. This initiative would add protections and potentially even change the compensation model to better protect consumers.

There’s a lot more detail in the Fed’s letter and white paper, which is available online. I suspect this is the first of many politically charged moves we’ll see this year. I just hope that some of these policies get it right and pull more families up from the depths of the housing collapse, helping to push economic recovery a bit harder and faster.

Posted in Market Conditions.

Mortgage Bills May Soon Be Simpler to Grasp

The Consumer Financial Protection Bureau has proposed a standardized mortgage statement that sets out to make it easier to understand the information about your loan on one page.

The proposed mortgage statement, released last week, includes a breakdown of such items as the amount paid from the monthly payment toward the principal, interest, escrow, the outstanding principal, maturity date, and any prepayment penalties. For adjustable-rate mortgages, the prototype also shows when the interest rate on the loan will begin to reset.

“This information will help consumers stay on top of their mortgage costs and hold their mortgage servicers accountable for fixing errors that crop up,” Richard Corday, the director of the Consumer Financial Protection Bureau, said in a statement. “Given the widespread mortgage servicing problems we’ve seen over the past few years, consumers need clear disclosures they can count on.”

Currently, the industry does not have an industrywide standard for monthly mortgage statements.

You can view the proposed form at The agency currently is soliciting public and industry comment. The form is to be formally proposed this summer.

Source: Consumer Financial Protection Bureau

Housing Inventories Drop, List Prices Rise

In a growing number of housing markets, sellers are facing less competition now compared to a year ago.

Inventory of for-sale homes has dropped by about 23 percent compared to this time last year, and fell by 6 percent alone from December 2011 to January 2012, according to data.

The age of the inventory is also declining, and is nearly 5 percent below levels last January.

The median age of for-sale housing inventory is lowest — 69 days or less — in Oakland, Calif.; Bakersfield, Calif.; Denver; Fresno, Calif.; Stockton-Lodi, Calif. and Phoexnis-Mesa, Ariz., according to January data from

Meanwhile, as inventory is falling, the median list price has been on the rise: up nationally more than 3 percent year-over-year. “Over the past year, an increasing number of markets have registered year-over-year increases in median list prices while fewer markets have experienced year-over-year list price declines,” a statement by notes.

The metro areas with the highest increases to median list prices year-over-year, from January 2011 to January 2012 are:

1. Miami, Fla.: 32.75%
Median list price (in January 2012): $265,500

2. Fort Myers-Cape Coral, Fla.: 21%
Median list price: $229,900

3. Punta Gorda, Fla.: 19%
Median list price: $179,000

4. West Palm Beach-Boca Raton, Fla: 18.6%
Median list price: $224,150

5. Boise City, Idaho: 18.15%
Median list price: $151,228

By Melissa Dittmann Tracey, REALTOR® Magazine Daily News

Posted in Market Conditions.

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