TURN TO PAGE B1 FOR THE WINNERS OF THE BEST OF 2019
THE FINANCIAL SERVICES AND REAL ESTATE WEEKLY FOR MASSACHUSETTS BY THE NUMBERS
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County close-up: Essex Spotlight: Beverly
IN PERSON
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Shaun Lover got his introduction to the building industry as a Northeastern University coop at Turner Construction and worked on projects including the Seaport East office tower before joining Columbia as a superintendent in 2003. He was named the 94-year-old company’s president in 2017.
WEEK OF MONDAY, NOVEMBER 4, 2019
RESIDENTIAL REAL ESTATE BY THE NUMBERS
THIRD TIME LUCKY
200,000 Around 200,000 Californians had to flee wildfires recently. The right taxes could reduce the risk disasters pose to housing. See Alexander Smith’s column on page 5. Source: Alexander Smith
33 percent If you need to cut your commission to secure a sale, split the cost three ways between the buyer, seller and agents. See Bernice Ross’ column on page 5. Source: Bernice Ross
7.25 percent The year-over-year growth in the year to date median single-family sale price in Lynn. See By the Numbers on page 6. Source: The Warren Group’s Statistics Module
$620 billion Homeowners are paying $620 billion more to the federal government thanks to 2017 tax cut legislation. See Lew Sichelman’s column on page 4. Source: ProPublica
$6.3 million The sale price of a condominium in Back Bay’s Burrage Mansion. See the Gossip Report on page 9. Source: The Warren Group
$458,000 The year to date median sale price in Essex County. See By the Numbers on page 6. Source: The Warren Group’s Statistics Module
53,000 53,000 buyers were overcharged on VA loans. See Lew Sichelman’s column on page 4. Source: Department of Veterans Affairs
$4.45 million The most expensive recent existing single-family home sale in Essex County. See By the Numbers on page 6. Source: The Warren Group
Unless otherwise noted, all data is sourced from The Warren Group’s Mortgage Market Share Module, Loan Originator Module, Statistics Module and/or proprietary database. For more information please visit www.thewarrengroup.com/business/ datasolutions.
COULD FED’S RATE CUT EASE PRESSURE ON BANK PROFITS?
When long-term interest rates dropped before the Federal Reserve began making moves on short-term rates, lenders saw their profit margins tighten.
Low Rates Drove Refi Flood, But Long-Term Rates Dropped BY DIANE MCLAUGHLIN BANKER & TRADESMAN STAFF
L
ow interest rates this year have driven commercial lending and spurred new and refinanced mortgages. But as long-term rates dropped before the Federal Reserve began making moves on short-term rates, the spread between what’s paid on deposits and earned on loans continued to flatten, hurting profits for many community banks.
Last week’s decision by the Federal Reserve to cut interest rates for the third time this year could add some steepness back to the yield curve and help reverse this trend. “One of the things we have been preaching forever is that the worst case for banks is lower interest rates,” said Frank Farone, a managing director with Newburyport-based Darling Consulting Group. Farone works with CEOs and CFOs at community banks and other financial institutions nationwide. He said banks have seen their yields on assets go down while customers have refinanced or taken out
new mortgages at rates near historic lows. “Meanwhile banks’ cost of funds continues to go upward,” Farone said. “And therein lies the squeeze.” With some banks paying more than 2 percent on deposits and charging below 4 percent on loans, opportunities for profit have become scarce.
Low Margins, Higher Volumes
While community banks and credit unions felt pressure from the low interest rate environment, they didn’t lack for customers. Those same low rates sent many flocking to their doors. Continued on Page 9
COMMERCIAL INTERESTS
VA L U E P R O P O S I T I O N
Calls for Development Restrictions Ignore Important Realities
Lower Land Costs, Rising Population Attract National Players
By Scott Van Voorhis | Banker & Tradesman Columnist
By Steve Adams | Banker & Tradesman Staff
Left Wing Threatens MetroWest Apartment Somerville’s Progress on Housing Market in Demand
Commercial Real Estate PAGE 3
Commercial Real Estate PAGE 7