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.
313 Commonwealth Ave is the latest in a growing trend of taking single family brownstone homes in Back Bay and converting them in to luxury condos. The former single family home, has been converted into 3 luxury condos that are expected to be completed for move in this December. What makes this project more unique than some of the others in recent memory, is that each home is coming complete with all of the most requested features. Among a litany of other features, each residence will come with deeded parking and outdoor space. Few other projects in Back Bay offer both of these much requested features to every unit. The kitchens will feature Marble counters and state of the art stainless steel appliances, and each unit has at least 1 gas fire place with granite surround as well as direct elevator access.
The penthouse duplex looks to set itself apart from other units in the neighborhood by offering 3 private decks, including a nearly 500 sq. ft. roof deck. This, combined with the deeded parking is sure to make it an attractive home to potential buyers.
For more information on the building check it out here on on our Luxury Building page. If you would like a private tour of the homes please give us a call at 617-449-3642.
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.
Mortgage requirements continue to tighten, but one thing remains constant; buying a home on a freelance salary continues to be more difficult than on a regular salary. The number of freelance workers is on the rise thanks to a tough job market. As a result mortgage companies are seeing a rise in this type of application. So what can you do if your a freelancer looking to qualify for a loan this fall?
First you can provide proof of a down payment. It doesn’t matter whether it’s a gift from a family member or account statement showing the money sitting in a 401k/savings account. The important thing is being able to prove in a verifiable way that you have the down payment ready and waiting.
Second you can prepare for a tougher review of your application. Gather your tax returns from the past 3 years. If your income had a big jump in the past year be prepared to answer questions on why. When you work on a freelance basis one of the most important things your application can show is that your income is on the rise. They want to see that you’ve had steady income bumps over consecutive years.
Third be prepared to seek out local banks. Local banks are often willing to go beyond what’s on application itself and look at the person applying for the loan. Local banks are the go to place when new developments need financing, because they are willing to look beyond typical lending restrictions.
Getting a loan on a freelance income isn’t impossible but it’s important to remember the three points above in order make the process easier. If you have more question on home loans or qualifications be please be sure to contact Pat Tobin at pwtobin@metlife.com .
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)
Boston Real Estate Market, Investment | Chris Dunn | 
November 28, 2011 4:23 pm | 
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