As the economy shifted, it became harder and harder for developers to get financing for new condominium projects. No one wanted to risk their money on new condo developments if they couldn’t guarantee buyers were going to be there. Lenders had clamped down hard on home-buyers, with tightened credit requirements making it difficult for anyone to qualify for a home loan mortgage.
The developers still have land to build on and still have bills to pay, so they’re turning now to building apartment complexes. The financing is easier to get, since banks realize that people have to live somewhere, and if not in condos then in apartments.
Here in Boston, we’re seeing several large, high-profile apartment projects being proposed and about to break ground. Some of these are already approved projects that are modifying their plans, taking out condos and putting in rental apartments. Others are brand new proposals. Driving the new construction is the relatively-easy financing as well as a simple lack of supply – the vacancy rate in Boston is expected to drop to 4.5 percent.
From the New York Times:
In the last several weeks, [Boston] officials have allowed developers of three buildings with nearly 1,000 units to decrease or eliminate condominiums in favor of additional rentals. Over all, the Boston Redevelopment Authority expects construction to start this year on 21 buildings with a total of 1,855 apartments, nearly all rentals, compared with just 600 starts last year. Of those units 830 were once planned as condominiums, said the authority’s director, John Palmieri.
Some of the projects on-tap for downtown Boston include:
Hayward Place – Downtown Crossing across from the Paramount Theater, 265 units (mostly apartments)
(Parcel 24) – Chinatown on Hudson Street, in the shadow of a Rte-93 on-ramp, 345 units (mostly apartments)
Kensington Place – Chinatown on Washington Street (previously the site of the Gaiety Theater), 381 units
Garden Garage Towers – near Boston Garden, part of the Charles River Park complex, 500 units
AvalonBay – on Exeter Street, on the Prudential Center Plaza, another apartment tower, 188 units
This is all good news; increased supply means more options for renters of any age: college graduates, young professionals, empty-nesters.
Whether or not the supply will bring down notoriously-high rents is another question. There seems to be an insatiable demand for apartments, right now. The developer of Hayward Place “said he could build high-quality apartments that would rent for about $5,000 a month.”
How many people are in the position to pay that? Hopefully, it will bring down prices overall, or maybe just keep them from going up?
More: As Boston’s Economy Grows, Demand for Rental Units Outpaces Condo Market, The New York Times
The Warren Group is out with condo and single-family home sales data for January 2011.
Condominium sales in Massachusetts posted a significant decrease in January, dropping almost 18.5 percent to 808 from 991 in January 2010. January marks the seventh consecutive month that condo sales decreased in Massachusetts.
The median condo price in January also declined 4.6 percent to $233,750 from $245,000 in January 2010.
Boston Proper condo sales dropped 4.76% from January 2010.
The median condo price dropped, according to the Warren Group, by 19.23%, from $572,000 to $462,000.
The drop is confusing to me because of the size. Obviously, something else is going on here.
Let me take a closer look and get back to you. My guess is that we had a bunch of high-end condo sales closings (The Clarendon and/or The Bryant) that is skewing the numbers.
Hello, new visitors to the Boston Condo Blog.
WRG is full-service brokerage firm located in the Back Bay. We help buyers and sellers of residential real estate in all of Boston’s neighborhoods. We also have a team of rental leasing agents located in the Back Bay and in Allston, at the corners of Commonwealth and Brighton avenues.
This blog will be helpful for anyone looking to buy or sell a condo or single-family home in Boston. News about pricing, listings, neighborhood developments, and quality of life issues. It will also include news and information on new residential, commercial, institutional, and educational construction projects and developments.
Developer Steve Samuels has proposed expanding his Fenway-based holdings to include a new project in the Fenway / Longwood Medical area.
According to the Boston Herald and Boston Business Journal, the $250 million plan filed with the Boston Redevelopment Authority would include a total of 290 apartments, 195,000 square feet of retail and 225,000 square feet of office space. There will be additional parking, too.
Samuels & Associates is the company behind the Fenway Trilogy apartment and mixed-use building as well as the 1330 Boylston complex.
In addition, the company is in the process of closing on its purchase of the 950,000-square foot Landmark Center, across the street.
What this means is that an almost-completely new neighborhood is being carved out of what was one a long-street of parking lots and one-story buildings, many car-parts and light industrial in nature.
Mayor Thomas Menino and Governor Deval Patrick met Monday to break ground on the new Yawkey Commuter Rail Station reconstruction project, the public transportation aspect of the Fenway Center development project. The Fenway Center development project has been cited to be one of the best things that will have happened to the Fenway area since Fenway Park. Yawkey Station is just the beginning and Mayor Menino expects more great things to come.
The $450 million Fenway Center development project will include more than 330 apartments, 370,000 square feet of office space, 150,000 square feet of retail space, more than 30,000 square feet of park space, and over 1,000 parking spaces. In addition, as part of the new development, Yawkey Station is to be built into a full-service commuter rail station with full-length accessible station platforms providing access from Beacon Street and Brookline Avenue.
The station construction, which commenced today and is slated to be completed in the Spring of 2012, is expected to create 150-200 jobs to the area, a bit of fresh air to an area that has seen construction halted in the recent years. Additionally, it is expected to increase accessibility to the area, as well as reduce vehicle traffic which has become and continues to be an increasing problem in the area.
“The new Yawkey Station is going to bring real benefits to our city and improve how people access the Fenway and Longwood Medical Area,” said Mayor Menino. “It will make traveling to and from this area easier and ease traffic on city streets while also putting 200 people back to work through the construction. Separately, the new station signifies the beginning of the larger Fenway Center project, which will significantly transform the public realm between Kenmore Square, Fenway and the Audubon Circle with the creation of a number of new amenities including retail space, housing, and new green space.”