Boston Real Estate Development - Good News For Buyers
PropertyShark, a site that provides comprehensive data for more than 90 million properties in New York, the Bay Area of San Francisco, and significant real estate markets around the country, has stated that 2,059 home sales of $1 million or more have closed in Boston since 2015. The only markets on the East Coast that sold more homes than the thriving real estate market in Boston were New York City and Washington, DC.
The East Coast Versus The West Coast
A lot of comparisons are made between the East and West Coasts, especially when it comes to which is the best place in which to live and cultural differences. One common factor the two coasts have is the prices of real estate which are beyond the reach of many buyers and the fact that most of the priciest homes are on the coast.
Why People Love Living On the East Coast
However, there are a lot of perks to living on the East Coast; especially in Boston, where the history of the country began. Boston has historic sites that date back to the Revolutionary War, 18th-century homes, and lavish, contemporary condos. Boston is also a culturally diverse city. One of the best things about living in Boston is access to nearby beaches, Cape Cod, and outdoor activities in the summer. Proximity to Logan International Airport makes commutes to other East Coast cities convenient.
Luxury Doesn't Always Mean A Mansion
When most people think about a million dollar home, they envision a luxurious mansion; which is what a lot of prospective buyers think about when envisioning their dream house. A market analysis was conducted by PropertyShark to determine how many buyers spent $1 million or more to live in one of the country's largest coastal cities. The cities that were under consideration in the survey have populations of 300,000 or more. The sales were only those which closed inside city limits within the last three years. The properties included in the study conducted by PropertyShark were those priced at more than $1 million and were single-family homes, condos, and co-ops.
Million-Dollar Coastal Homes
Although 57,006 homes valued at $1 million or more were sold on the West Coast in comparison to 39,113 homes on the East Coast, one of the considerations is that more cities on the West Coast have populations of more than 300,000. However according to the market analysis conducted by PropertyShark, New York City sold as many million dollar homes as Los Angeles and San Francisco, the two highest-ranking cities on the West Coast.
The majority of the million-dollar home sales in New York City during the three-year period were in Manhattan, with 24,457 sales. Million-dollar residential property sales in New York City account for approximately 81 percent of the million dollar homes sold on the East Coast. Although Boston was in third place in terms of million-dollar home sales, the only city that was close to Boston was Miami, with 1,854 buyers who spent $1 million on a new home.
Interesting Statistics About Recent Home Sales
Although Philadelphia is the East Coast city with the second largest population, home sales in the million-dollar price range were considerably lower. Only 260 buyers spent $1 million or more on a new home in the last three years. Boston is way ahead of Baltimore, Philadelphia, and Miami in terms of million-dollar home sales. At the lower end of the list are Virginia Beach with 303 home sales, Philadelphia with 260, Baltimore with 138, and Jacksonville with 91.
It's not a surprise that Los Angeles had more million-dollar home sales than any other city in California. What's interesting is that more than 10,000 buyers purchased homes in San Francisco for $1 million or more. The number of homes in San Francisco in the $1 million or more price range is only approximately 12 percent of all the homes in New York City in the same price range.
Expansion of Tech Businesses
Tech businesses have been causing the price of homes in the San Jose area to increase, according to a recent study. The median price for homes in San Jose is $894,000, and in the last three years, 7,993 homes priced at $1 million were sold. As far as million-dollar home sales on the West Coast, San Diego is in fourth place, while Honolulu comes in fifth; interesting since it's considerably smaller than some of the other cities in the market analysis.
Although Portland, Oregon has more million-dollar home sales than comparable cities in the Northwest, it still ranks behind Boston. During the three-year period in which the market analysis of homes priced at $1 million or more were sold, a total of 96,119 buyers purchased million-dollar homes on both coasts.
Changes For Boston Apartment Landlords
Owners of apartment and condo buildings in Boston could benefit if the federal deductions for interest on mortgages and state and local taxes are eliminated or capped. In an upscale region like Boston, homeowners can take advantage of federal deductions. When the deductions are eliminated, prices rise.
A lot of the potential buyers in the Boston market may decide to rent rather than buy until the Republican Congressional proposals are all sorted out. However, there is good news for prospective buyers in Boston. The rental market is already tight, and with more people searching for rental properties, the prices will go up.
When prices for rental properties rise, it affects other costs, even expenses like child care. With fewer people searching for residential properties, the prices will start to come down, making them more affordable for first-time buyers.
Apartment Costs In Top Markets
Zumper, the site that provides market statistics states that the top five real estate markets for apartment rentals are San Francisco, New York, San Jose, Washington, DC, and Boston. The average cost of renting an apartment in San Francisco is between $3,390 and $4,380, a slight decline over last year.
Prices for one-bedroom apartments in New York City are $2,290; up by one percent. Two bedroom apartment prices are up by five percent to $3,360. Rentals in San Jose, in a year over year basis, are up by nine percent. The median price for one-bedroom apartments is $2,330, while two bedrooms are priced at $2,870. Th largest year over year increase is in the Washington, DC market. One bedroom apartments are $2,230. The increase of 14.2 percent is in two-bedroom apartments, which is the biggest in the top 10 rental markets.
Analysis Of Residential Costs In Top Markets
According to Zumper, as of December 1st, 2017, two-bedroom apartment rentals in Boston are the sixth most expensive of any city in the country. Zumper's market analysis tracked both apartments that are available for rent in Boston as well as vacant apartments to get a good indication of where the market stands. The analysis was conducted for median-priced, two-bedroom apartments.
The median price for two-bedroom apartments in Boston is $2,690, which is lower than Los Angeles, San Francisco, Washington, San Jose, and New York. For one bedroom apartments, Boston's median price is $2,250, while Los Angeles came in sixth. The increase of the price of one-bedroom apartments in Boston since 2016 is 2.3 percent.
The top 10 markets haven't changed at all in terms of rankings since 2016. However, there have been changes as far as market growth or decline is concerned. The median rental price nationally for one-bedroom apartments grew to an average of $1,233, an increase of 4.9 percent. The median price for two-bedroom units remained consistent at $1,392.
As far as year over year statistics, one-bedroom and two-bedroom units are up by 8.3 and 3.2 percent. The statistic was surprising to many in the industry since seven of the top ten markets experienced considerably less growth.
Milestones and Trends For Boston in 2018
One of the biggest news stories in Boston real estate for 2018 is One Dalton in the Back Bay. The tower is at the Four Seasons Hotel & Private Residences. One penthouse in the new complex is under contract for $40 million. One Dalton has three penthouses. One went under contract for approximately the same price last year, and the third doesn't yet have a potential buyer.
The penthouses are in what will be the tallest residential tower in the New England area. If any of the penthouses sell for $40 million, it will set a record for residential property sales in Boston. The buyer of the penthouse under contract for $40 million is Michael Dell of Dell Computer.
Assuming the sale goes through as planned, it will be the highest price anyone has ever paid for a condo in Boston and the most expensive residential home sale in Boston. Currently, the highest price ever paid for a condo in Boston is $35 million at Downtown Crossing's Millennium Tower.
According to the newest apartment listings on Zumper for the Boston area, the median price for a one-bedroom apartment is $2,200, the same as the previous month. Boston is right behind San Francisco for the priciest apartments. The rental price for two-bedroom apartments in Boston only increased by 1.2 percent. These latest figures could be the beginning of a trend that would bring relief to apartment hunters.
New Development In and Around Boston
Hundreds of new apartments are being added to developments under construction which will help with the demand for new housing in Boston and lower costs. The exciting news in the real estate market is the new high-rise complexes on the Boston skyline. The Four Seasons Hotel & Private Residences with its 742-foot tower will be Boston's tallest residential high-rise. Other residential buildings currently under construction are Mass + Main in Central Square, Cambridge, Bullfinch Crossing in Downtown Crossing, and Wynn Boston Harbor in Everett. Due to the construction in the area, Newbury Street to the Back Bay had to be closed three times during the past summer.
How Public Transportation Could Improve for Boston
The vehicle closures in Boston due to the current construction are giving city officials ideas about how to make the city easier to get around in the future. Among the concepts being considered by city and state officials are a mobile app, plastic card, or both, which would work the T, commuter rail, and bike-share system. The app and card could be integrated to work with Uber. Zipcar, and other private transportation systems. Mayor Marty Walsh calls the new system the "key to the city" which could also be used to pay parking meters, making it unique as far as metro transportation.
Alternative to the T
One project in the works to make getting around Boston easier for commuters is a gondola which will run from Seaport to South Station. The gondola project is the concept of the Millennium Tower in Downtown Crossing group. The gondola will be able to transport up to 15,000 people each day. Another transportation project being considered is extending two of the major line on the T. Easy access to public transportation is one of the factors people consider when moving to a major metro area like Boston.
New Development Around Boston
The former Wonderland Greyhound Park is in the process of being demolished to make way for new development. The 38-acre site's clubhouse and grandstand will make way for new development. One of the best features of the Wonderland site is its proximity to the Blue Line; the area where much of the city's major construction projects are either in the works or are in the planning stages. Another area nearby which will be the site of a major construction project is the former 161-acre Suffolk Downs site. Suffolk Downs is a prime location for mixed-use residential and retail construction. The site could be developed in a similar manner to the former South End's Boston Flower Exchange. When completed, the project will include retail and commercial space, life science research, and underground parking. In addition, the public will have access to a 30,000 square foot park.
The plans for the extension of the Green Line will make way for new mixed-use development, resulting in more than 14,000 new jobs for Boston and more residential development. One of the areas being considered for major renovation is Union Square in Somerville for mixed-use and commercial development. Plans include retail and office spaces, a hotel, and as many as 1,000 new residences. New multi-family complexes are being constructed in areas that are within walking distance of the Green Line, making them attractive to buyers. the new stations on the Green Line are expected to be completed and open by 2021.