Boston’s housing market, fueled by strong economic growth, has been blisteringly hot the past few years — and nearby towns and cities are basking in the warmth and glow. With few exceptions, communities in or near Boston have seen Massachusetts’ biggest gains in median home prices between 2012 and 2017, even in already expensive markets like Brookline and Cambridge. The Boston real estate bonfire has now spread to once-affordable pockets of the city like Southie and Roslindale, and gateway cities like Lynn, Lawrence, and Brockton.
“Real estate is about jobs,” says Timothy Warren, CEO of the real estate market tracking firm The Warren Group in Boston, which also publishes Banker & Tradesman. “Just being close to the Seaport and Kendall Square and these centers of good-paying jobs, that makes a big difference.” No surprise, then, that all 12 of this year’s hot communities offer subway or commuter rail service to the city and its jobs.
Our desirable dozen have seen the largest leaps in single-family home values across four different price categories (more than $1 million, $750,000-$1 million, $500,000-$750,000, and under $500,000). Results are based on median single-family home price increases from 2012 to 2017, using sales data from The Warren Group. (We’ve excluded cities or towns with fewer than 75 single-family sales last year or in 2012.)
While we highlight the very hottest of local markets, nearly all of Greater Boston has experienced a dramatic surge in home values. It’s hard to find a community inside Route 128 where median, or midpoint, home prices didn’t climb at least 30 percent since 2012.
That’s great news for folks who bought their home in the post-recession slump. But if you’re on the other side of the homeownership divide, these steep increases are nothing to celebrate. “Affordability is a big issue, and creating new housing is difficult, so we’ve got real problems there,” Warren says. “We can’t sustain this kind of growth if we don’t have [affordable housing].”
BOSTON, MA — Starting soon, the overlook area on City Hall Plaza will transform into something called "The Patios" complete with a daily beer garden, ice cream, mini-golf, and puppies. Yes. Puppies.
It's part of a a three year plan put together by Boston Garden Development Corp and the City of Boston to revitalize the plaza at City Hall and create "a vibrant welcome public space." The city contracted Boston Garden Development Corp, a subsidiary of Delaware North to oversee the effort.
And the summer Pop Up opens on May 4 and will be there through August with special events and food trucks
The area will feature a beer garden from Wachusett Brewing open daily, ice cream from Honeycomb Creamery from Cambridge mini-golf, a mobile book program from Boston Public Library and picnic promotions from Boston Public Market.
"The Patios project is a flexible public space that brings a scale of intimacy to a place famously the opposite," said Smith in a statement.The city commissioned Sculptor Jeff Smith to help design the area, including an art installation entryway and patio design made of local, reclaimed wood that will display a Boston sign. Smith is a sculptor and filmmaker who built the 'Smallest House' in the World and is now on a mission to popularize the perfect shape. He has created sculpture using salvaged material for some three decades, according to his website.
So when will the beer garden be open? Every day. Wachusett will rotate through their selection of beer on tap and also feature several guest brewery tap takeovers to bring variety to those who visit.
WACHUSETT Beer Garden Hours
MONDAY-WEDNESDAY: 4 p.m. to 9 p.m.
THURSDAY + FRIDAY: 4 p.m. to 10 p.m.
SATURDAY + SUNDAY: noon to 10 p.m.
But you're here for the puppies, aren't you?
Those fuzzy adorable ones will be brought to City Plaza by Shultz's Guest House, a 501c3 dog rescue shelter, based in Dedham. Its mission is to rescue lost, homeless and abandoned dogs in the southern part of the country; to provide for the medical care, sheltering, and transport; and to focus on adoption of healthy puppies and dogs.
Each Wednesday, "Wag Wednesday" from noon to 2 p.m. you can come play with some of their furry friends and learn more about their adoption process.
Residential Real Estate Heading into spring, residential real estate results in the First District continued to reflect sellers' markets. Closed sales for single family homes and for condos were up in Maine, Vermont, and Rhode Island, while other areas experienced moderate decreases. (Vermont reported combined results for single family homes and condos. All First District areas but Connecticut reported changes from February 2017 to February 2018; a technical issue caused December 2017 to be the most recent data from Connecticut.)
Because of ongoing inventory shortages, all reporting areas but Vermont reported increases in median sale prices for both single family homes and condos. A contact from Maine pointed out that negotiations over multiple offers may be fueling higher median sale prices: "multiple-offer situations [are] happening on a regular basis, especially on properties at $250,000 or less." Inventory dropped by double-digit percentages year-over-year across all area markets. A contact in Massachusetts noted that "inventory is so low and demand so high that many low- and moderate-income home buyers are being left on the outside looking in."
Notwithstanding the prospect of rising interest rates, contacts cited eager buyer populations and were optimistic about activity levels in coming months.
Commercial Real Estate Reports from First District commercial real estate contacts were mixed, but positive on balance. Office leasing demand remained strong in Boston, especially in the urban core, leading to further increases in rents. Providence saw stable, healthy office leasing activity and modest upward pressure on rents. Office leasing remained slow in the Portland area and weakened further in Hartford. Industrial and warehouse space enjoyed robust demand in most of the First District, with the exception of Connecticut. A Portland contact reported that industrial rents in that city increased 20 percent from a year ago in response to demand from diverse users including small manufacturers, while a Boston contact said that demand for retail fulfillment centers had driven up industrial rents in the Boston metro area.
Nonetheless, contacts say that both industrial and office construction have been restrained by the fact that building costs remain high relative to rents. Multifamily apartment construction was expected to slow moving forward amid slower or flat rent growth in most areas. By contrast, condominium development activity increased in both Boston and Portland. Investment sales activity was stable at a slow to modest pace depending on location. Two Boston contacts perceived small increases in capitalization rates for office properties that were seen as consistent with increases in interest rates. Commercial real estate contacts were optimistic on balance.
The former London offices of the White Star Line—famous for the RMS Titanic—have been converted into seven luxury residences priced up to about $27.5 million
Oceanic House, built in 1907. PHOTO: JASON ALDEN FOR THE WALL STREET JOURNAL
On April 10, 1912, the “unsinkable” RMS Titanic set sail from Southampton to New York. To book their passage, many of its wealthy seagoing passengers ascended the stone steps of Oceanic House, headquarters of the White Star Line in London.
The Titanic calamity spelled a long, slow death for the White Star Line, and Oceanic House, lavishly built in 1907, fell into decline. But now, after a circa $35 million restoration, the 33,000-square-foot building has been converted into seven luxury residences priced up to about $27.5 million.
When London-based Misland Capital bought Oceanic House in 2012 for around $28 million, the building, located in the St. James neighborhood of London’s West End, was in a sorry state. After being sold by the White Star Line it was sold on to a bank, the British government and eventually to a kitschy Tex-Mex restaurant.
“It was tired, with decrepit ceiling tiles and a dormer added in the 1960s,” said Peter Rochow, director of Misland Capital, a firm that manages the assets of British businessman Peter Green and family, who have substantial property holdings in London. “Some of the windows were broken, and it was generally very neglected.”
The biggest structural challenge of the renovation was to remove the ugly dormer and rebuild it, using Welsh slate tiles to clad the roof and Portland stone to recreate its original decorative pediment.
The dining room in the penthouse. PHOTO: JASON ALDEN FOR THE WALL STREET JOURNAL
This space now holds the penthouse’s open-plan living room and dining room, divided by a double-sided fireplace, with views of the Palace of Westminster and Big Ben from one of its two terraces.
“You will not need a clock in this apartment, that’s for sure,” said Simon Fernandes, a partner at Strutt & Parker, the apartments’ joint selling agent along with Beauchamp Estates.
The decor is simple: dark timber floors and a monochrome color scheme enlivened by touches of a rich, deep blue—a nod to the ocean. The Poggenpohl kitchen has a mix of taupe gloss and charcoal cabinets. There is also a study and second living room. The property comes furnished right down to spaghetti waiting to be boiled on the cooktop.
The penthouse’s lower floor, accessed by a black polished plaster stairwell, has four bedroom suites, some with original porthole windows. Wood paneling is a constant theme, a subtle nod to the décor of Titanic’s first-class cabins, but interior designers Morpheus London have kept overt nautical references firmly in check.
The penthouse bedroom has a porthole-shaped window. PHOTO: JASON ALDEN FOR THE WALL STREET JOURNAL
This 5,496-square-foot penthouse is listed for about $27.5 million, while apartments—in rooms where the White Star Line’s clerks would once have had their offices—start at $6.1 million for a 1,604-square-foot, two-bedroom property. One of the seven apartments has already been sold to a German-American couple.
In the seven weeks since they formally went on sale, Mr. Fernandes said second-home buyers from China, South Africa, North America, and Europe, as well as British buyers looking to downsize from country houses, had expressed interest in Oceanic House.
In terms of its location, St. James’ sits on the fringes of prime central London and lacks the cachet of, say, Mayfair or Knightsbridge. However Mr. Fernandes pointed that Oceanic House, seconds from Trafalgar Square, has an average price of $4,200 per square foot. In prime central London average prices are typically between $5,600 and $9,800 per square foot.
Prime London prices have taken a Brexit-related hit since 2014, with average falls of around 7%, according to estate agent Knight Frank.
But Mr. Rochow is resting his faith in the building’s unique history, the quality of its design, plus the weakness of the pound. “We are confident, but we know we are not in the same market we were in in 2014,” he said. “We are going to have to work a little bit harder.”
Today's housing market is arguably one of the most competitive in history. A record low supply of listings, coupled with extraordinarily high demand from the largest generation, mean fast-rising home prices and more people going after the hottest properties. Bidding wars are now the rule, rather than the exception.
So how do you win a bidding war? Best to be prepared before you even begin your search and to carry equal amounts of patience and humor with you … if possible.
Decide on your absolute maximum price. This factors in the monthly payment on your mortgage (if you need one), property taxes, homeowners insurance, potential homeowner association or condominium fees, and a general estimate of monthly upkeep (lawn care, pool guy, unforeseen repairs). Then start looking for homes priced slightly less than that maximum. This gives you some wiggle room in the bidding war.
1. Come with cash. Not everyone can do this, but if you can make an all-cash offer, you will have an advantage. In certain very hot markets, investors are heavy, and they usually come with cash. Sellers don't want to deal with the possibility that your loan might not come through, or they may not want to wait the extra time for the mortgage processing, so they prefer cash. In some cases they may even cut the price a bit to get the cash. Coming with cash can actually double your chances of winning a bidding war, according to Redfin, a real estate brokerage. You can always take out a mortgage after the deal closes.
2. If you don't have all-cash, try waiving the financing contingency.That is when the deal is contingent on your loan being approved by the lender. Be careful though, you don't want to end up on the hook for cash if the loan doesn't come through, so get a fully underwritten loan pre-approved from your lender before submitting your offer. This could improve your chances of winning a war by 58 percent, according to Redfin.
3. Try a personal letter to the seller. I did this once myself, and it worked on a deal I never expected to win. Selling a home is just as emotional as buying one, especially for sellers who have lived in the home a long time and have raised their kids there. Sellers want to know a little about the people taking over their precious nest. If you're a young family, write about how you can see raising your children in the cozy family room and how you already envision them playing in the back yard. Write about how much you love the neighborhood and want to become an active part of it. DO NOT tell the seller if you plan to gut the home. That could gut the deal.
4. Finally, don't be afraid to walk away. The last thing you want to do is get over-emotional and overstretch your budget. Don't be house-poor. That defeats the whole purpose of the investment.
And remember, there will always, always be another perfect home.
John Ryding, RDQ Economics chief economist, and Phil Orlando, Federated Investors chief equity market strategist, provide their outlook on the markets and economy after last week's comments by Fed Chair Jerome Powell on interest rates. We don't need a Fed put, says Orlando.
The Massachusetts Convention Center Authority and a handful of private companies, including Vertex, are working toward launching weekday ferry service from Lovejoy Wharf near North Station to the Seaport District-slash-South Boston waterfront.
The authority has issued a request for proposals to underwrite the service for a year, with an eye toward extending it for three additional years. If the authority can line up the private funding—and it looks like it can—then service could start in late August or September.
Mortgage rates fell over the past week to their lowest levels in a month and are now below where they stood at the end of February.
The week was a repeat of the familiar pattern we have seen repeatedly for the past few years: Just as macroeconomic fundamentals are poised to push rates higher, geopolitical fears seize the headlines, prompting a financial flight to safe assets and pushing mortgage rates downward.
Looking only at interest rates and not at the broader context, U.S. home shoppers have been indirect beneficiaries of a tumultuous world buffeted by fears of financial instability in China and Brexit over the past two years, and now fears of a global trade war. The decline in mortgage rates is all the more telling because it occurred the same week that the Federal Reserve increased short-term lending rates. After steepening somewhat during the first two months of 2018, the yield curve is again flattening.
Beyond ever-present (and difficult to predict) geopolitical risks, markets are likely to watch for inflation data due Thursday as well as speeches by two Federal Open Market Committee voters early next week. Markets will be closed for the Good Friday holiday, which could temper volatility, although borrowers should expect conservative pricing going into the long holiday weekend.
↑ Speaking of especially beautiful neighborhoods in springtime, Beacon Hill is probably the city’s most aesthetically pleasing year-round, what with its narrow lanes, brick sidewalks, antique townhouses, window boxes, and the occasional cobblestone street.
↑ The South End, too, with its Victorians and vegetation, can provide walks to savor when the blooming starts.
↑ The Charles River Esplanade provides not only a fantastic hangout for the warmer months, but fantastic views of Cambridge across the Charles River. Here’s Harvard from Boston.
↑ Can’t go wrong in the spring with Boston Common, what with its hidden gems and its many activities (swan boats, anyone?).
↑ The Harvard-owned Arnold Arboretum in Jamaica Plain provides 281 acres of springtime reminders. Plus: Bike paths.
↑ A number of fabulous waterfront parks, including Christopher Columbus Waterfront Park in the North End, can provide excellent vantages for soaking up the warmer temps.
↑ And have we mentioned the Public Garden in spring?