John and Anthony on Why The Boston Condo Market is Red Hot
Related blog: 6 Ways to Get Your Home Ready to Sell in Just 30 Days
They say you can tell how well the housing market is doing based on what’s happening with condominiums. In Boston, demand is way up, supply is way down that’s being reflected in pricing of course our real estate experts John McGeough and Anthony Lamacchia from Lamacchia Realty are here to break it all down for us here this morning. Safe to say the condo market in Boston is healthy
I would say it’s extremely healthy. A quit stat—it’s going from an average sale price from what is it, mid sixes back in 2010 we’re now well over a million, a million forty two to be exact, so you’ve seen a huge increase in sale price.
Is it a simple case of economics, where demand is up and there’s not much on the market?
Yes without a doubt. Back in 2010 there were 1900 condos on the market, as of this morning, there are 444. Think about that—we put a great chart up on our website you can see the inventory in 2010 is starting to go down and in 2012 it fell, and right when it fell, pricing went up.
What’s driving the demand do you think?
That’s a good question, rates are still low, supply is very low, so you know that classic economic model where you have demand high supply low and you’re seeing multiple offers you’re just seeing tremendous activity now.
But they’re also more confident, they realize wow the economic bust was six years ago it was not a year ago, two years ago, and people are getting their confidence back in their market as a whole, and that’s why you’re seeing more and more people getting back into buying. You’re seeing young buyers and it’s great.
So it’s not so much a case of people downsizing saying I’m going to go from a house to a condo
There’s some of that and I think there will be more of that based on demographics in the next 10 years.
And people say I’m going to downsize the condo will be more affordable but the pricing may be well wait a minute this is not what I was expecting.
Yeah you measure in Boston which is more condos than single-families, I think that’s why you’re seeing more of a push towards condos and in many cases it does make sense on a downsizing or even upsizing than later on life it’s a wide variety now.
What would you advise people now looking for condos because some people will say well you should buy a house rather than a condo?
It depends on what kind of lifestyle you want. If you want to have your own space, and you want to be able to cut your lawn and be out in the yard doing those things obviously don’t buy a condo. But there are a lot of people and you mentioned it sometimes older folks say you know what, I’m done cutting the lawn I’m done dealing with the snow plowing especially after this winter, let me just pay a condo fee every month and let somebody else worry about it.
And that’s another thing too John, a condo fee you need to pay attention to that because that’s going to factor into your overall budget and some are higher than others.
That’s right especially now. Years ago, in the boom time, which we’re starting to get back into, folks will overlook, buyers wouldn’t really look at the financials, how much the budget was, how healthy the association was, is there money put aside for a roof, siding, things like that . So we always encourage folks to look at the monthly condo fee is, and also ask for the most updated condo budget,
Make sure the association is healthy.
Some may also have a homeowner’s association fee which may be a yearly fee to go along with the fee,
Yeah I would say most work it into the condo fee.
Do your homework.
Absolutely, make sure you know all of it, because as John mentioned if they have things budgeted correctly and they have sufficient money then the fee is not likely to go up in the next few years. If they have no money and it’s an unstable association—we saw a lot of that five years ago after the bust, then you better be careful.
Let’s talk about supply. New condos —that’s really what the new construction is in Boston right now isn’t it?
There’s a couple of big projects coming on, one in the Seaport District, I believe.
There are 118 units scheduled to come on the market later this year
And in Charlestown
I feel like I keep saying Seaport last year there were projects going on in the Seaport, and here we are again there’s more of them, there’s something coming up in Charlestown.
Those are 3 big projects but there are also renovation of multi families. Taking the triples, turning them back into condos, which was the biggest rave 10 years ago, so we’re seeing that come back, and all of a sudden 3, 4, 500,000 for a flat is not uncommon,
And one thing John mentioned that is interesting, back in 2010, 63% of the condos for sale were under $500,000, today, 47% are under $500,000. And another thing I was going to add is now that the market is doing so well, you’re going to see more and more new construction come on so this inventory is not going to stay this low forever. And we’re going to see more come on, and we need it.
For the real estate market it’s all good news. It’s getting into the home buying and home selling season, we’re going to get you guys back to talk about the best approach for that down the road as well. John and Anthony as always we appreciate it.
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