Here's the latest installment of Bates By the Numbers, a weekly feature by Boston real estate agent David Bates that drills down into the Hub's housing market to uncover those trends and people you would not otherwise notice. Follow him on Twitter and check out his ebook, Context: Nine Key Condo Markets, 2.0.
Tony Giacalone Jr. has been a broker in East Boston since 1987. I recently spoke with Tony about this key Hub market.
What's one of the biggest differences in the condo market compared to when you started?
In 1987, a lot of the first round of condominiums were being developed, but here were really no people to live in them. They were almost all bought up by speculators and not owner occupants. So that's totally changed now. Now you have a whole bunch of people in their 20s and 30s looking to buy condos in East Boston that want to live in them.
Can you describe today's East Boston condo market?
Today, East Boston is hot, but you really don't see a large-scale development. So, if you say I want to go buy a condo in East Boston between $180K and $500K, you're lucky if you're going to find 10 to look at. But, if you had 200 condos here, you'd have 200 people buying them and living in them.
Who is the typical East Boston condo buyer?
Condo buyers are primarily 28 to 35 years old. It's often their first purchase and first relationship. A lot of times they're single, a lot of times they're couples. They are someone who is somewhat familiar with East Boston. They might be a renter in the area or have a friend or co-worker who lives in the neighborhood. Basically, the same people were buying in 2004. You just have more of them now.
Is it fair to say the East Boston rental market has changed more than the East Boston condo market?
Definitely. On the rental side, you're totally seeing a transformation because people are willing to pay almost double for an apartment that has been upgraded—central air, new kitchens, etc.—so you're seeing [landlords] upgrade the apartments.
Why is this demographic making East Boston their home?
People who were born 25 years ago to parents that live in the suburbs really don't want to live in the suburbs. They want to live in the city. They want to be able to take the train to work. They want to live in a neighborhood with other young people like themselves. They want urban living and you see that all over the country. East Boston fits right into that formula: it's an urban neighborhood near the center of the city, two train stops away, kind of like Brooklyn, N.Y., or parts of Chicago, or parts of Washington, D.C.
When I say an East Boston neighborhood could you say the first things that come to mind? Jeffries Point?
People think it's hip and cool. The reality is that it's really pedestrian-friendly with a high walk score. There's a train station and there are lots of different parks and a high owner-occupancy rate
Eagle Hill has a lower owner-occupancy rate. More tenants, a little more trash, a little more graffiti, and you're going to be a little farther away from the train.
More of a long-term stable neighborhood for East Boston's middle-class from, say, 1950 to 2000.
The Waterfront has lots of publicly owned land. In Jeffries Point, there seems to be a strong demand. But you also have the Meridian Street Waterfront, where it just hasn't really seemed to take off.
I noticed a few East Boston condos recently went under agreement for more than $500,000, kind of an exciting new price point for the neighborhood. What is happening with condo pricing in East Boston?
You still see things as cheap as $159,000 and a lot of people don't want to talk about them, but they're still out there. And then you see people attempting to get $769,000. I don't think it's a $700,000 market. You see sales as high as the mid-fours, but the average East Boston buyer is in the twos, maybe even the threes. There just haven't been a significant number of sales in the upper fours or fives to say that's a market trend. It's an emerging market.
How important is getting a parking space with a condo in East Boston?
I think half the people that live in East Boston live there because there are five T stations. Zip Car is really popular now. It's always nice if you have a parking space, but that's really not a priority. The priority is finding a decent place in a decent location, meaning T-accessible.
What's going to happen in the East Boston condo market in the rest of 2014 and 2015?
I think you will see appreciation, but you need more product. There's just no product. There's definitely no shortage of people who want to live in a funky neighborhood near downtown Boston… but there's definitely a shortage of supply.
· Our complete East Boston archive [Curbed Boston]
· Our Bates By the Numbers archive [Curbed Boston]