Banker & Tradesman February 15, 2016

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the

financial

www.bankerandtradesman.com

WEEK OF MONDAY, FEBRUARY 15, 2016

services

and

real

estate

weekly

for

massachusetts

A Publication of The Warren Group UNLOCKING VALUE

They’re Not Making It Anymore State And Boston Have Real Estate For Sale BY STEVE ADAMS BANKER & TRADESMAN STAFF

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ore than 400 real estate developers crowded into an open house sponsored by state officials in October for the kickoff of the new “Open For Business” initiative, eager to get details about 42 public properties from the Berkshires to Cape Cod that will be sold to the private sector. State agencies own 20,000 properties and Gov. Charlie Baker has set a goal of unlocking the value of underutilized real estate assets, both to support mixed-income housing in pricey Greater Boston and encourage job creation in the commonwealth’s economically-lagging Gateway Cities. Real estate officials from state agencies have been meeting regularly to narrow down the inventory of parcels that will be put on the block. In Boston, Mayor Martin Walsh’s administration is conducting an inventory of hundreds of neglected municipal parcels, viewing them as potential solutions to Walsh’s ambitious housing goal of 52,000 new residences by 2030. Boston officials have identified 258 cityowned parcels that could be made available for up to 750 units of future residential development, said Sheila Dillon, the city’s diContinued on Page 10 PLAYING THE LONG GAME

Breaking Up Is Hard To Do Community Banks Quietly Erode Market Share BY LAURA ALIX BANKER & TRADESMAN STAFF

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reaking up the big banks is a popular topic of debate in the ongoing Democratic primary, but closer to home, community bankers hope to translate that populist sentiment into new customers. To be certain, community banks do offer a unique value proposition – and their customers know it. According to last year’s American Consumer Satisfaction Index, regional and community banks received higher marks than their national bank contemporaries on nearly all counts, except for the number and locations of ATMs and branches. Yet big banks still dominate the market. Bank of America captured nearly 18 perContinued on Page 11

LESSONS LEARNED FROM LAST YEAR

2015 IS IN THE REARVIEW MIRROR AND SPRING’S AROUND THE CORNER After The Best Year In Nearly A Decade, Experts Weigh In On What To Expect in 2016 BY JIM MORRISON | BANKER & TRADESMAN STAFF

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y almost every measure, 2015 was a great year for residential real estate in the Bay State. Sales and prices were both up significantly – but what does that mean for 2016? Rising rates, a less-painful winter season and an economy that continues to improve will all play a role in the months ahead. According to data from The Warren Group, publisher of Banker & Tradesman, 2015 sales of single-family homes were up 10.5 percent from 2014, after a slow start due to severe winter weather. The median sale price rose 4.7 percent year over year to $340,000, within striking distance of 2005’s record high of $355,000. Though good fortune favored cities and towns inside Route 128 and was unevenly distributed beyond that, on balance, the year was so strong, it left some wondering if we are experiencing another bubble. According to Freddie Mac, the answer is no. Using a tool it calls the Multi-Indicator Market Index (MiMi), Freddie Mac combines four economic indicators (purchase applications, payment-to-income ratio, employment and the number of borrowers who are current on their mortgage) with proprietary data to create an index value for real estate markets. In the January report, Massachusetts scored an 84.4 on MiMi, earning it an “in range” rating, which is defined as being “within its long-term normal range and may be considered stable.” The report says this is largely due to low unemployment and increases in purchase applications over the last three months. A score of less than 80 is rated “weak;” over 120 is rated “elevated.” The U.S. as a whole scored an 82.5. Massachusetts’ highest MiMi rating was in April 2005; the state then had a score of 122.6.

A Decade Of Single-Family Sales Number of Sales

Median Sale Price

2015

54,592

$340,000

2010

41,800

$295,000

2005

60,523

$355,000

Where Will The Deals Be In 2016?

Some markets have bounced back more quickly, while others have already surpassed their previous peak prices Continued on Page 8

Source: The Warren Group

CONTENTS

In Person ������������������������������������������������������������������ 7

Banking & Lending ������������������������������������������������ 11

Points ����������������������������������������������������������������������� 4

Residential �������������������������������������������������������������� 8

Classified Sections ������������������������������������������������� 14

By The Numbers ������������������������������������������������������� 6

Commercial & Industrial ���������������������������������������� 10

Records Section ������������������������������������������������������ B1


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