Boston ended 2014 by hitting a major real estate milestone: the combined value of the city's residential and commercial properties exceeded $100 billion for the first time. Additionally, Greater Boston now has a value of approximately $600 billion. This makes the area one of the top 10 spots nationwide with the highest real estate values.

What Does This Mean to Home Buyers?

There is no end in sight to Boston's population boom, and Mayor Walsh has even released a plan to build 53,000 new residential units by 2030. Real estate values are climbing every year, but 2014 also saw an increase in listings by 8.2 percent from the previous year. This means that current home owners and real estate investors are willing to part with their units, and it is definitely possible to get a good deal right now that might not exist in just a few months.

In 2013, real estate in the Boston area increased in value by 8.1 percent. This past year, home values continued to increase, but there was a 60 percent smaller bump. The increase was still high enough to help people make a nice return on their investment, and there is no reason to believe that this trend will not continue in 2015. As a matter of fact, the recent announcement about the property values in Boston is likely to drive prices even higher. Therefore, home buyers and people who want to bulk up their residential real estate portfolio would be wise to make a purchase as early in the year as possible.

The Impact on Taxes

During the last 12 months, the value of residential properties in the Greater Boston area have shot up almost 5 percent, and the medium home value now sits at $364,900. People who choose to rent instead of purchasing a home can expect to pay a median rent amount of $2,137. However, the higher property values and continuously increasing demand for residential units in Boston makes it much wiser to invest in real estate instead of renting.

Some real estate investors and potential home buyers might be concerned by the increasing property values due to the misconception that this will cause them to pay an exorbitantly high tax rate. Fortunately, the reality is that Boston has one of the most affordable residential tax bills in the state, and moving into the city will save you an average of 30 percent in taxes versus living elsewhere in Massachusetts. This is due in part to a city law that prohibits the increase of tax levies by more than 2.5 percent per year. Additionally, the tax rate for residential properties in 2015 is $12.11 for every $1,000, and this represents a decrease of $0.47 since last year. In other words, you will be able to take advantage of the perks that are associated with having a residential property with a higher value without having to pay a large tax bill.

Low Taxes Equal Investment Gold

Investing in real estate can be a very lucrative venture, and the high demand in Boston makes the area a great place to build a portfolio. In fact, condos in the downtown area are currently worth approximately 16 percent more than they were just 12 months ago. Houses throughout Greater Boston increased in value by 4.9 percent during the same time frame, so an investor should have no difficulty selling real estate for a profit. The lower residential property tax rate within Boston will help ensure that you will get more bang for your buck, and you will definitely save money over other cities that have high home values such as New York City.

What Does the Future Hold for Boston Real Estate Values?

It is impossible to know for certain which investments will eventually pay off with extremely high property value increases, but all of the current data suggests that Boston's real estate market will be strong for many years to come. This is due at least partially to the huge influx of residents that Boston is experiencing, and the number of people living within the city limits is expected to exceed 700,000 by 2030.

All of these people will need a place to live, and Mayor Walsh's bold housing plan will help fill in some of the gaps. However, it remains to be seen if 53,000 units can actually be completed within 15 years, and a failure to meet at least this minimum metric will invariably drive property values through the roof due to a lack of supply. Even if developers are able to keep up with the demand, the positive economic benefits of going through a population boom should help houses and condos continue to appreciate at a healthy rate.

Taking Advantage of This Solid Real Estate Opportunity

Whether you are a home buyer or a real estate investor, it is best to have a professional and experienced team on your side so that you can make the best possible decision. After all, each person who purchases real estate has different needs, and it can be very difficult to make sure that all of these needs are met unless you turn to an experienced realtor. The team at Boston City Properties has a proven history of working with investors and buyers from every possible demographic and targeted price range, and we can help you find the right property to take advantage of Boston's increasing property values.

One of the biggest perks of choosing our brokerage team is that you will have access to listings within each neighborhood throughout the Greater Boston area. We are headquartered downtown, and many of our team members live in some of the most gorgeous and exclusive neighborhoods. In other words, we are able to remain constantly up-to-date with market changes and new listings, and this will make it much easier for you to quickly locate the perfect property for your new home or real estate portfolio. Contact us at (617) 247-1933 to learn more about how we can help you harness the many great real estate opportunities that are waiting for you in Boston.

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