Errr…here we go again. More damage control for our stable and steady downtown Boston Real Estate marketplace! This mornings Globe featured an article with a disgusting title on the front of the business section and boy this puppy could not have been described any worse.

The article reviewed LINK (downtown Boston MLS) data for the popular urban neighborhoods here in Boston and although as a whole, sales (volume) was down 22% the average selling price only declined 1%. So what the heck does this mean?

Well…it means that inventory remains fairly low, great product is selling well (in some instances at or above asking), and individuals who aren’t beat up by the credit crunch are buying.

Now on the flip side…(and if you read the entire article) you will see that certain neighborhoods continue to “BOOM”.

“Prices slid nearly 33 percent on Beacon Hill and 21 percent in the North End, but were up nearly 12 percent in South Boston and more than 10 percent in the South End.

The South End has retained its value, Blair said, because it “has matured and gentrified” and is an attractive neighborhood, yet more affordable than the Back Bay and midtown, where median prices exceed $1 million. The South End’s median price is about $600,000.”

Side note: Remember, Boston is not this enormous marketplace with thousands of transactions per quarter. Boston is a very conservative and reasonable sized market and a market in which has grown tremendously over the past 3-5 years. That being said, many things can ’skew the numbers’ in a market this size.

For example just a few multi-million dollar sales in a tiny neighborhood in Beacon Hill could boost ’spreadsheet’ growth in one particular year and make the next year look like a down year. Hmmmmm….

An even BIGGER effect on this market is the new developments. Newly converted and/or newly constructed condominium developments have these long sales & closing cycles. Sometimes when your selling a 300 unit development over a 18-24 month window you don’t acknowledge it yet…. and when the building is ready to close you belt out 150 units in a quarter - it skews the number - bigtime!

That being said I needed to belt this out ASAP….be sure that details are to follow as this Boston Globe article is NOT evidence of what is really going on in the Boston Condo Market!

Oh and and one more side note: The Mortgage Market (my sweet spot) has tightened but certainly not gone away. My quote in the Globe article today wasn’t as clear as I had hoped it would have been conveyed…

“New lending rules that require larger down payments of as much as 20 percent are particularly hurting sales of units priced from $600,000 to $1 million, the so-called middle market where young professionals are the largest buying group, said Anthony Longo Jr. of Condodomain.com, an online buyers’ brokerage firm.

Even at the low end of that range, buyers would have to come up with $120,000 or more for down payments.

Most of these young people don’t have the 20 percent to put down,” Longo said.”

Well…here is the real scoop.

Yes lending has tightened its guidelines…more so on B & C paper…and a tad on A paper. So all you credit worthy individuals…there are still great mortgage products, programs and rates for all types of housing (including condos)!

Here is the example in which I was referring too. Jumbo loans (non Fannie/Freddie otherwise known as loans north of 417k) are looking for a little more skin in the game compared to last year.

Example: Last year on a $750,000 purchase a lender would be ok with 5-10% down depending on how strong your credit and assets were…well this year its a bit different and lenders are looking for 10-15% for the same scenario.

My point of the quote I gave Kim Blanton was that these young, savvy and very successful young professionals who live here in Boston make the monthly income to easily support 600k, 700k, 800k mortgage payments and have the 5-10% liquidity to put as a down payment on these loans…however with the mortgage industry forcing them to put 10 - 15% and sometimes up to 20% on pre-construction condo development, this is what is forcing these buyers into a smaller / less expensive unit.

Bottom line…especially after this article in which may have scared sellers … its a good time to buy if you are not effected by the ‘temporary’ mortgage lending guides.

Interested to see where you stand financially in this real estate market? Get a free pre-approval from Christina Longo (my sister) - contact information is here on our Finance Page.