Boston Housing and Rental Markets are on fire...

[pescamaaan]

this is a rant, and somewhat disjointed from the recent posts, but the rental and housing markets in the greater boston area and booming.

i've been a renter for the last 8 yrs. i've always managed to find a steal or a great value - my current 2br, 1500sq foot duplex is ocean front, 2.5 bath, new everything...i pay $1600 and first started renting it 2 yrs ago.

our lease is up...(landlords sold the townhouse for a big loss) but it sold very quickly.

and now that we are back in the market for an apt, rent is expensive again. anything that is decent in the boston area goes quickly and you can't touch a decent 2bd room for under 2200 - closer to 2500 in boston's popular neighborhoods.

we also looked at a few homes for sale on the north shore (beverly, manchester, ipswich, etc)...of the 3 houses we saw, 2 were sold before the first open house, the third sold the week after the first open house.

my coworker is looking for a home in the cambridge/somerville area. admittedly he's looking for a nice place with multiple bedrooms, renovated etc....places are selling quick - bidding wars in some cases.

i've waited a long time to buy a home, having read a lot of grantham's letters and EJ's postings. in my head i still want to wait, but it's getting hard to ignore what i am directly observing in my search for a new place to live

[EJ]

Re: Boston Housing and Rental Markets are on fire...

this is a rant, and somewhat disjointed from the recent posts, but the rental and housing markets in the greater boston area and booming.

i've been a renter for the last 8 yrs. i've always managed to find a steal or a great value - my current 2br, 1500sq foot duplex is ocean front, 2.5 bath, new everything...i pay $1600 and first started renting it 2 yrs ago.

our lease is up...(landlords sold the townhouse for a big loss) but it sold very quickly.

and now that we are back in the market for an apt, rent is expensive again. anything that is decent in the boston area goes quickly and you can't touch a decent 2bd room for under 2200 - closer to 2500 in boston's popular neighborhoods.

we also looked at a few homes for sale on the north shore (beverly, manchester, ipswich, etc)...of the 3 houses we saw, 2 were sold before the first open house, the third sold the week after the first open house.

my coworker is looking for a home in the cambridge/somerville area. admittedly he's looking for a nice place with multiple bedrooms, renovated etc....places are selling quick - bidding wars in some cases.

i've waited a long time to buy a home, having read a lot of grantham's letters and EJ's postings. in my head i still want to wait, but it's getting hard to ignore what i am directly observing in my search for a new place to live

My caveat on the housing market is this: buy housing where the brains are because housing prices ultimately correlate to incomes, and incomes will be increasingly dependent on ratified knowledge.

Cambridge/Somerville is an island housing market fed by the population of MIT, Harvard, and Tufts graduates who stay.

Cambridge/Somerville real estate does not decline, except 2006 to 2007 during year one of the collapse of the housing bubble.

They marry, have kids, then move to Lexington, Weston, or Bedford or other suburban town with a good school system. Either that or they stay and pay for private school. Net of property taxes, it's cheaper to move.

This has been going on for 50 years. It's only going to intensify. Cambridge will expand into Arlington and Arlington into Belmont. Same situation as in Palo Alto, except with different geographic dynamics due to the CA highway system.

[pmmeaney]

Re: Boston Housing and Rental Markets are on fire...

Would the dynamic you describe for Boston be similar for someplace like Hanover, NH but on a smaller scale? There are a broad range of spin-off companies from Dartmouth. One problem I see for the Hanover area is that it is heavily dependent on two big employers - Dartmouth and DHMC. Dartmouth took a pretty good hit in 2008 and 2009, but the hospital remained pretty unscathed. Now it seems that the hospital (DHMC) may be quite vulnerable with significant budget cuts at the NH statehouse with eventual layoffs. As alluded to above, there is one very good school system (Hanover, which is shared with Norwich, VT and to some degree with other surrounding towns) but the quality drops off quickly as you move away. House sales have slowed considerably in Hanover and even worse in the surrounding towns. My guess is that there will be a lag before any price drops - but they may come if there are more layoffs. I'd be curious about your opinion.