Boston apartments to be built in the thousands
Feb 2011 26

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

Condo association fights and arguments cause trouble
Feb 2011 23

If you want to own a home in downtown Boston, just about 90% of you are going to end up living in a condominium. The lucky/fortunate few will be able to buy a single-family home, but the vast majority of you (us) are going to end up owning a floor in a five-story walk-up with neighbors in very close proximity to us, a part of what’s known as the “condo association”.

A few weeks back, the Boston Globe ran a series of articles on what it’s like to live in a condo association. Basically, hell on earth, was their point of view. There was the story of the condo owner in a building on Beacon Hill who basically hated her neighbors who hated her back.

But, for most of us, living with others in a condo building is simply a part of life. Infrequently do we get involved in the personal lives of our neighbors – we may never even see them in the hallways for months at a time. (Yes, it’s true.)

The real estate blog had a clever little entry about the different types of condo associations you might encounter. I think the author, Sam Schneiderman, hit it right on the head, in his Challenging condo associations entry.

He organizes the typical condo associations under five headings. Which one’s yours?

1.) Financially-mismanaged condo assoc.
2.) Physically-mismanaged condo assoc.
3.) Invisible condo assoc.
4.) The broke condo assoc.
5.) The well-managed condo assoc.

I’ve never been a part of any of those, truth-be-told. Maybe well-managed, but that’s only because it was still under the control of the builder, and he took care of everything.

Each of the other four comes with its own set of problems. If I had to rank, the “financially- and broke-association” is worst: the type of association where there’s never enough money to pay for desperately-needed repairs. Try coming up with $30,000 as a special assessment from owners when you need a new roof. Better would be to have monthly condo fees sufficient to build a capital reserve. And, these days, not only is it wise because you’ll have money on hand, it’s practically a necessity if you ever expect to get a potential buyer approved for a home loan.

If your association has low owner-occupancy, then you may have already encountered the “physically-mismanaged” association. If a lot of owners are renting out their units, and they live elsewhere, they probably don’t know or care about leaks or broken doors – they just want their rent checks. Only a disaster or major crime will get a rise out of them.

A commenter adds one more: There’s also the mentally mismanaged condo association, with at least one member who is both highly vocal and bats**t insane. Apparently this is required by city ordinance in Cambridge, where every association has one.

Boston condo sales volume down in January, avg. prices down
Feb 2011 22

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.

Fourth group bails on Rose Kennedy Greenway developments
Feb 2011 17

Sad news regarding the Rose Kennedy Greenway.

The Boston Globe reports today that the YMCA has canceled its plan to build a new facility on a parcel atop the Rose Kennedy Greenway. It’s the fourth and final organization to pull out after being awarded rights to build. The others are the New Center of Arts and Culture, the Boston Museum, and the Massachusetts Horticultural Society’s “Garden Under Glass”.

The most disturbing part of the announcement is what was said by a city official regarding future plans for the multi-acre swath of land.

I spit up my lunch at this quote:

“The notion that this could be one continuous space, and not subdivided by buildings, is a powerful realization,’’ said Kairos Shen, the city of Boston’s chief planner. “The question now is, how do we make sure there are enough activities on or around the Greenway to bring more people down there?’’

The four parcels set aside for buildings were chosen because they are the sites of off- and on-ramps from and to the now-submerged Central Artery.

Leaving them exposed means no one will be able to enjoy the entire walk from one edge of the Greenway to the other. It won’t be aesthetically pleasing, at all.

This latest development means we are back at square one. The wrong decision would be to not build anything. With a turning economy, perhaps now is the time to hear new proposals. By the time they get going, we should see a lot more spending, both private and public. We can certainly find people to donate money to fund new museums and centers.

I was ambivalent about the YMCA proposal, only because the facility wouldn’t be located in a neighborhood, but beside it (the North End). The other proposals were for projects that could be enjoyed by “everyone”.

But, it’s a moot point. They all failed.

The Greenway was conceived from the beginning as a mix of open space and short buildings to be used by community and cultural organizations.

That’s the only smart decision those in charge of the Greenway have made over the past twenty years!

The image above is from the Boston Globe website. It comes from the Massachusetts Turnpike Authority – because, of course, they’re involved, too

Welcome to the Boston Condo Blog
Jan 2011 13

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.

Please bookmark the Boston Condo Blog website and track us on facebook and twitter.

Thank you.

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