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.
Boston, it's time to admit you have an inventory problem. For a long time you denied it. You said that your inventory challenges were no big deal, that they were temporary, but have you considered that maybe you're living in denial? Have you considered that this might be a long-term problem and that you need to do something about it?
Take a look around, Boston. Your "for-sale condo inventory" has been shrinking for about as long as my seven-year-old daughter has been alive. On April 1, 2006, you had 2,853 condos on the market. Now, that's the type of inventory I would expect from a City of Champions.
But a few years later, when your April 1 inventory barely broke 2,000, the excuses started. Back then, you told me that listings were light because of the economic crisis. Boston, I love you, I believed you wholeheartedly, but isn't it funny how when the real estate market turned around, you had even fewer listings, barely over 1,000? And isn't it funny as well that as we see some record pricing this year, your April 1 inventory is down to 475 units on the market?
Just 475 condos on market. That type of public display is embarrassing, Boston. I suppose you're going to tell me that people just don't want record prices for their real estate anymore, that record pricing isn't much of a motivator anymore.
I know you say that there's nowhere to build, Boston, but, please, we've heard it all before. Admit it, there are lots of places to build. Really, how much land do you need to build condos? I recently heard that on the site of just one garage a developer is planning to put up six buildings ranging in height from six to 60 stories. And, guess what, he's keeping half the garage intact. Yeah, Boston, how many garages do you have that could be put to better use? How many parking lots do you have that could fit buildings? What's more important: housing cars or housing people? You have to make a decision and the sooner you make it, the better it will be for everybody.
Boston, have you noticed the impact your lack of inventory has had on the people and places around you? A few years back, Charlestown had 161 condos on the market. You know what it had on April 1 this year? Fifteen. That kind of explains why Charlestown's median asking price went from $469K to $899K over the last couple of years, doesn't it? For crying out loud, Boston, Charlestown's median ask is approaching Beacon Hill's ($947K on April 1). If that doesn't convince you to get some inventory, what will?
Really, Boston, it's time to take a sober look at your neighborhoods and the communities around them and acknowledge that they have only one-fourth or one-fifth or one-tenth of the inventory that they used to have and that it didn't happen overnight. It's time to take a look at the median prices in these areas, before the median hits infinity—and still gets four offers—and realize the ridiculously high medians that you are seeing in 2014 are a direct result of your lack of inventory.
And, really, it's time to work day-by-day to do something about it. Boston, you know I'm only telling you this because I care about you.
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