Over the past few years the number of people who have decided to rent our their condos in Boston rather than sell them has certainly increased, and in some cases dramatically so. The side of effect of all this renting is just beginning to show it’s face. We’ve already talked about how rentals are now priced sky high, (see here) but there is now a second side that is starting to show it’s face.
Owner Occupancy Rates
Most people have never really focused on this little used metric when buying a home, but it’s incredibly important. The most important use of this statistic is when it comes to getting a mortgage. Most mortgage companies want to see minimally 50% owner occupancy and most would like to see more than 60%. For many condo buildings in Boston this has never been a problem but with the increase in de-facto landlords many buildings are now flirting with this number. The result, it’s become another obstacle for many buyers to overcome, not just from a mental standpoint but from a closing standpoint.
The mental aspect is that buildings with high owner occupancy rates are generally better maintained, since the people living there have a vested interest in how the property looks. Since so many owners have now become de-facto landlords however, this type of thinking might need to shift. It needs to be recognized that some of these people will not be landlords much longer as the market improves.
If you have questions about Owner Occupancy Rates or other questions related to buying a home, contact our office at 617-449-3642.
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.
Luxury condo sales in Back Bay Boston are on track to be ahead of last year. While the overall market is slightly down from last year, sales of condos costing 1 million or more are actually up slightly from last year. Sales between the first of the year and September 1st in the overall market are off 3% from last year during the same time period. As we being the fall sales market it will be interesting to see if both numbers continue along their current paths or if we’ll see changes big changes in volume estimates.
Not sure how many people caught this article in the NY Post about Bachelor Pads helping Bachelors in New York seduce more than their fair share, but it’s an interesting article. The article does cite a celebrity as one its examples which subtracts a little from their argument, but it makes for interesting reading. The question is: Ladies of Boston have you ever been seduced by a view? Fill out the poll below and we’ll release the results with a follow up post.
(*Fixing Polling Software)
Back Bay Condos, Boston Real Estate Market, Financials | Chris Dunn | 
January 23, 2012 3:50 pm | 
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