It’s inevitable that as we begin the new year, we look back and see in full review what happened last year. This will be the first in that series but it’s important to take note as we look ahead to 2012.
So what part of the market was the most active in 2011? Across the city the best performing price range in 2011 was the $1-2 million range. The sales volume for condos in this price range was up just slightly over last year. To drill down further though, you’d find that the truly best performing market was Back Bay condos under $500,000. The sales of condos in this price range, in this neighborhood were up 18%. This large jump, when many sections of the the market saw a decrease in sales volume is most certainly a result of increased rental rates. As rental rates around the city increase more and more people are looking to purchase their first home. For many people this number is right around $500,000. This segment of the market we believe will continue to be strong this coming year as more people continue to face rental increases.
The photo above is of a new sub $500,000 condo on Commonwealth Ave in Back Bay. For more information on this home check it out here.
This past week mortgage rates tied their all time lows with the national average on a 30 year fixed rate reaching 3.94%. Low rates have pushed up first time buyer sales in Back Bay, where the number of properties sold under $500,000 is up 20% from last year. This should come as no surprise given the dramatic rise in rental prices in the neighborhood over the past year. More and more people are starting to realize that owning in the city can be cheaper than renting especially during a housing market like this. The numbers are also helped by parents of young professionals, who are in some cases, providing the down payment for the children to purchase that first home.
If you are interested in buying a home for the first time or have questions about buying your first home contact us and we’ll be happy to walk you through the process and answer all of your questions.
More and more parents are helping their kids buy their first home. Wealthy boomer parents with cash, are using the money to provide a down payment for their child’s first home instead of putting the money into the stock market. Many of these parents, are hoping to help their children take advantage of the low-interest rates and in some areas of the country, depressed real estate prices.
This national trend can be seen around Boston as some parents look at the high cost of rent as a fruitless expense and would much rather see their children put the money towards the purchase of a home. The gift of a down payment makes it entirely possible for a child to be able to make the monthly payments while they build up equity in a property they actually own.
For more information on gifting a down payment to your child contact Pat Tobin at MetLife. If you’re interested in discussing options for your child give us a call at 617-449-3642.
You only get one chance to make a first impression, it’s the same for houses as it is for people. Some statistics say as people we make a decision about whether we like someone in the fist 5 seconds of meeting them. This is generally based on facial expressions, body language, what they are wearing and perhaps some of the first words out of their mouths. Houses just like people make quick first impressions too. There’s curb appeal, the feeling you get when you’re inside, the way it’s decorated and kept up/cleaned. The major difference though, is price. You have to remember you’re paying for the home, so price is a key component of that first impression.
Pricing a home is just as much art as it is science, but it’s important to get it right the first time. Homes that aren’t priced correctly tend to stay on the market longer and potentially have multiple price drops before they finally sell. Recent Back Bay sales data shows what a difference pricing your home correctly the first time can make. Homes that are priced right the first time generally sell in the first 100 days and sell for 6% more than their counterparts that are on the market over 100 days. The big difference though is that homes that sell in under 100 days are 4 times more likely to be sold for asking price or better.
If you’re interested in finding what your home is worth contact our office at 617-449-3642. Our knowledgeable and experienced agents will help you determine the best price for your home.
This weekend I had a conversation with a couple who are thinking about investing in real estate. Concerned with the instability of the stock market, and complaining about the lack of interest they are earning at the bank, they thought real estate might provide better and safer returns. This couple is not alone in looking at real estate as an investment lately.
While much of the US still appears to be finding the bottom of the housing crisis, the greater Boston area has been thriving relatively speaking. Homes in the Back Bay neighborhood are not selling in the volume they once were, but prices are certainly up. The pricing maybe pushing some first timers away, but as a result it’s causing rents to reach the highest levels they’ve ever been. (see our story here) For those with cash though, there are plenty of attractive investments out there.
Most banks are offering their best customers 1% with most offering cd rates around .4% so it’s no surprise wealthy clients are looking at their options. Decent Boston condos are offering returns in 5% neighborhood due to strong rental demand and a predicted short come of housing for several years to come. For those that are more serious about real estate investment, they are finding multi-families that are generating between 10-20% returns.
Investing in real estate is not for everyone and as with any investment it comes with it’s own risks, but with markets in turmoil and banks offering next to nothing, real estate becomes an attractive option. For a personalized real estate investment guide contact our office at 617-449-3642.
For years foreign buyers have been investing in Boston real estate as they look for stable long term real estate investments. As the world has gotten smaller, more and more foreign parents are sending their kids to school in Boston and many parents are making the decision to buy rather than rent. In recent years, many families have taken advantage of the great exchange rates and purchased homes for their children while they attend college in Boston. Right now, congress is on the verge of voting on a bill that would give these parents a little something extra, a residence visa.
The bipartisan bill would give any foreign property buyer who spends at least $500,000 a residence visa. The amount can be further broken down, with the buyer only spending $250,000 on their residence and using the remaining to $250,000 to purchase an investment condo for renting out. According to the Wall Street Journal the biggest groups taking advantage of this offer are the Chinese and Canadians.
At Back Bay Realty Group we’ve seen a surge in investor buyers in recent months with many coming from China, India and Canada. The number of sales as a result of foreign buyers has increased in the United States has increased by $16 Billion in the past year alone. If you’re thinking of investing in Boston real estate call our office today at 617-449-3642 to speak to some of our investment specialists who can discuss options with you.
The Australian consulting firm 2thinknow has just released it’s annual list of the most innovative cities and the world. Can you guess who came out on top? Boston topped the list beating out San Francisco and New York, based on our cultural assets, human infrastructure and networked markets.
There can be no doubt that a good deal of this award goes to the efforts of the people at Onein3 and Boston World Partnerships. These two city run organizations, have been working to help bring together neighborhoods, small business owners and young entrepreneurs all over the city, to help grow their businesses and improve Boston. They have done a great job with this monumental task and this is fantastic recognition of their efforts.
Last week the ACEEE released it’s 2011 State Energy Efficiency Scoreboard and Massachusetts came out on top. Massachusetts beat California for the first time, by making big leaps in energy efficiency after the 2008 passing of the Green Communities ACT.
This is great news for everyone in Boston as we become more and more efficient in our energy usage. For those of you that are looking for ways to improve on your energy bills, check out our friends at myenergy.com. These guys will help you track and improve your energy costs and then reward you when you use less!
Everyone knows rental demand is high. It’s high across the country, from San Francisco to Chicago to Boston rents are way up. In Boston, the demand is particularly high and for those looking to move in now, pricing is beyond all reasonable expectations. This week we placed a few quick calls and took a look at our listing sheets and realized that the current average price to be in a high rise Studio in Boston and parts of Cambridge is $2900/month. Keep in mind this is a studio, which means no fully private bedroom. Now, most landlords I know generally try and stick the 1/3 rule before requiring a co-signer. This means that your monthly rent should not exceed 1/3 of your monthly income. For those that need help with the math, that means in order to rent one of these studios you should be making $104,000 a year. Now you’re asking yourself who’s going to pay that? The short answer, you are!
Yesterday, as I was looking at a new rental building in downtown, another agent asked me what I thought of the units. I responded, I thought they were over priced. The agent replied, “but they are 70% rented and it’s only been open 3 months.” The units started at $2700 for their smallest unit. This means that despite all the logic and rational thinking, people are continuing to spend upwards of $2700 on something without a true bedroom.
People complain about the high rent in the city, but as long as the demand remains buildings are going to continue to raise the rent as high as they can.
Sunday turned out to be a better day than most of the TV weather reporters were predicting. The morning started bright, sunny and afternoon wasn’t too bad either. So why are we talking about the weather on a real estate blog? This beautiful Sunday would set the scene for a large open house day, 58 open houses in Back Bay alone. So on this beautiful day why were all the open houses empty? Every open house I visited I was told by the agent I was the first person to stop by. So where were all the buyers?
Interest rates are currently hovering at or below 4%, (depending on the circumstance) and yet with financing so affordable one would think that buyers would be looking to take advantage. So again I ask why were the open houses so empty? Tomorrow we’ll go over our thoughts on the open houses we visited and give you a wrap up.
Back Bay Condos, Boston Real Estate Market | Chris Dunn | 
January 10, 2012 11:43 am | 
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