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. Follow him on Twitter and check out his ebook, Context: Nine Key Condo Markets, 2.0.
When my wife got pregnant, she told me, "We need more space, we're moving." I took a look at the available condo inventory and ended up buying a three-family instead. I kept the unit and space I wanted and sold the other two units as condominiums.
A few years later, when my wife got pregnant again, ditto my real estate response. That time, instead of buying a three-family, I bought a two-family and sold one of the units for pretty close to what I paid for the building before I fixed it up.
Compared to buying a condo, this strategy required significantly more capital, work and risk. Yet, in the end, I got the home I wanted at a discounted price.
Not everybody buys a multifamily to get the condo they want. But multifamily purchases are terrific for Hub investors who like the rental income or want to do a for-profit condominium conversion. Additionally, more than a few triple-decker owners have family members in each unit, like my great-grandfather had in his Brookline multi back in the day. And who can pooh-pooh it when a tenant's rent help pays the primary residence's mortgage. There are certainly some great reasons to buy a multifamily in an area that has a triple-decker history.
What's happening in the Hub's triple-decker market this year? Well, through the first eight months, of the year, Roxbury sold 21 multies and the median price climbed to $500K, a 54 percent increase over the same time period in 2013. Someone even paid $735,500 for a brick three-family in John Eliot Square that had 4,220 square feet and "countless possibilities." I guess it might not be long before we start talking about Fort Hill with the same enthusiasm as we talk about some of the Hub's other markets.
Speaking of changing markets, this year seven multies in Southie topped a million-buck selling price. That's a little different than the first eight months of last year, when only one Southie multi topped a million. In Cambridge, where a million dollar price tag was just par for the course, median multifamily prices are up 24 percent. And, in Brookline, another million-dollar multifamily market, prices are up 36 percent. I'm sure that lack of condominium supply is helping drive the multifamily price in those markets.
As for the Hub's high-volume, but not previously high-priced, multi markets, in East Boston, pricing is up 28 percent from the first eight months of 2013 to the first eight months of 2014; and in Dorchester, Medford, and Malden, multifamily pricing is up 12 to 15 percent. In Somerville, multi median pricing was up 15 percent, but in the "New Somerville," Everett, multifamily pricing was up only 5 percent.
While multi prices are soaring in some markets, in Roslindale, the multifamily transaction count is soaring, up from 17 in the first eight months of 2013 to 40 so far this year, the highest transaction counts since 2006.
· Our Bates By the Numbers archive [Curbed Boston]