'Tis the unofficial start of summer (how 'bout that three or four days of spring, eh?) and therefore the perfect time to gauge what you should be following real estate-wise in this fair region of ours. Definitely keep an eye on the fever-pitch pace of luxury rental development in Boston proper as well as on a certain redevelopment fight in Cambridge. There's also a supposed crackdown a-comin' on a certain type of property owner and a milestone could either be reached—or missed dramatically. As always, stay tuned. And thanks for reading.
Luxury Rental Development Glut
There are thousands of new apartments under construction or planned in Greater Boston; and a huge proportion of them might be considered luxury. And we're talking luxury luxury—as in $10,000 penthouses and $3,000 studios. Just how many can the market support, though? There have been a plethora of tenant incentives in the last several months, including rent-free months and no security deposits. Yet, the pace of leasing has been rather brisk at these new spots. Take the Kensington in downtown Boston, for instance (its pool is picture above). Leasing started in late 2013, and its 381 units are now more than 80 percent leased. These include 2-BRs asking nearly $7K a month. Yes. Seriously.
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Luxury Rental Projects Pivoting to Condos
Of course, developers and landlords are none too keen on seeing a glut, what with the lower rents and copious tenant incentives that would surely bring. One way to throw the brakes on that possibility—and given the frenetic for-sale market, a market that shows few signs of slowing this summer—is to pivot to condos rather than rentals, however luxurious. A couple of high-profile Boston projects already have, including Lovejoy Wharf (rendered above). Might others follow by the fall?
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Sullivan Courthouse Redevelopment and Cambridge's Master Plan
Grab some popcorn and crack a beer, 'cause this one never ceases to entertain. And! It's taking on a whole dimension this summer. We'll explain. Basically, area residents are opposed to the redevelopment of the old Sullivan Courthouse in East Cambridge into 22 stories of offices, retail and apartments. Why? Because it's too tall, too dense, yada yada. Recently, developer Leggat-McCall agreed to chop two floors off its plans to placate the opposition. No word yet on whether that will do the trick, but all this kerfuffle comes as Cambridge moves toward a master plan for its future development. The Sullivan Courthouse redo could serve as a model for said master plan or an aberration.
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Slumlord Crackdown—Or Maybe Not
Recent reporting in Boston Magazine and the Boston Globe has exposed the extent of awfulness of Boston slumlords, particularly in student-heavy neighborhoods such as Allston. Not only are the slumlords particularly loathsome (as opposed to the slumlords who are just dandy), but the city has been rather lax in enforcing existing rules, much less in strengthening them through new regs. The Walsh administration recently sent letters to hundreds of property owners, reportedly warning them about violations, etc. Whether this crackdown extends beyond memos remains to be seen.
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$1,000,000 and Climbing
Congratulations to us all: The average sales price of a downtown Boston condo reached nearly $950,000 in the fourth quarter of 2013, and has likely breached the $1M mark already. Some credit newer luxury condo developments such as Millennium Place and 45 Province, while others say it's the low mortgage rates and the general desirability of the city as a place to live and play. We'd say it's these two things as well as the cartoonishly low inventory, not just in downtown Boston but in the entire region. Add more condos to the mix—many more—and prices would likely fall dramatically. Of course, that's not happening any time soon. But! The mortgage rates might inch upward throughout the summer. Might downtown Boston condo prices start, then, inching downward? This frothy perfectly healthy housing market can't go on forever.
· Talking Boston Landing, Seaport, Avalon Exeter and the Verb [Curbed Boston]
· The Market Loves Avalon Exeter and Its $10K Apartments [Curbed Boston]
· Radian Boston's $3,000 Studios Up for Grabs Next Week [Curbed Boston]
· Glut, Glut! '14 a Tipping Point for Boston Apt. Development? [Curbed Boston]
· Sullivan Courthouse Developer Willing to Chop Some Floors [Curbed Boston]
· Average Downtown Boston Condo Price Nears $1M [Curbed Boston]
· Boston, It's Time to Admit You Have an Inventory Problem [Curbed Boston]