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 you would not otherwise see. Check out his ebook, Context: Nine Key Condo Markets, 2.0.
For a while, it seemed that Mike Ross, the moderator of the four member panel at Bisnow's "2014 Boston Real Estate Forecast" was about as likely to give Merrill Diamond a chance to speak as Jimmy Kimmel is to give Matt Damon a guest chair.
Yet, about halfway through the presentation, the politically astute Ross-- a former candidate for Boston mayor--allowed the 70-year-old founding partner at Diamond Sinacori to weigh in and quickly take on the role of panel contrarian. The trained architect with 35 years of development experience and two Brighton condo projects in the works didn't waste time pooh-poohing Boston's booming luxury apartment development market. In 2011, surveying the permitting happening in the Seaport, Diamond had written on his company's website, "YES, THERE WILL BE A GLUT OF APARTMENTS IN BOSTON." Subsequently, he remained on-point on the matter. On Tuesday morning, he told the crowd of 300, "I never thought there would be enough wealthy people who would fill up all these expensive apartments on the waterfront."
Now, the man who has been named a master in residential marketing, is predicting that 2014 will be "the tipping point" for a switch from apartments to condominiums, the year that consumers realize that they can own a condominium for what they pay in rent, the year when developers change long-term hold strategies to short-term profit plays via condominium development. Diamond noted that a few years ago, apartments were the only financeable development option, but times are changing. He said that he knew for a fact of that some plans on the drawing board for apartments were going condo.
While some are skeptical about this generation's value of home ownership (and ability to pay for a home) as compared to eras past, Peter Spellios, executive vice president of Related Beal, agreed that the timing was good for condominium development and that that had factored into his company's decision to develop condos instead of apartments at Lovejoy Wharf. Justin Krebs, a partner at Normandy Real Estate added, "Our neighbors from National have made the decision with AEW that their last stage of their project is going to be condominium [at the Ink Block]."
In the past, Diamond has turned a former small pox hospital, a jail, and a pumping station into luxury condominiums and now he is talking about a luxury rental market turning into a high-end condominium market. "I don't want to be the voice of doom for an apartment developer," said the real estate futurist/alchemist, "but I think things are about to change and about to change dramatically and I do think that will be the big story in 2014."
Do you think he's right?
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