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Here's the Reason Boston Prices Are So High Right Now

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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 2015: 14 Hub Condo Markets

One recent column I wrote touching on the lack of inventory and escalating prices provoked a reader to comment, "It's bubblicious." Another reader of another column noted that his or her household had lived in the City of Champions since 2012 and it was "too expensive," so they were calling it a day. "Buh-bye," they wrote.

A third more derogatory commenter wrote basically Boston "sucks." Sure, the anonymous extant comment could have been from NFL commissioner Roger Goodell, but it's more likely that it was from another disgruntled Hub real estate consumer who can't figure out how to get what they want in this market.

In recent years, it seems as if city life has become about as popular as interest in a Kardashian photo shoot. Everyone from Millennials to empty-nesters to private companies wants to be in the city. So there's a great pool of very able buyers.

But what really got us to this point in the first place is the lack of inventory, a situation which didn't occur overnight and which won't relent quickly. More than a year ago, I wrote that in many of Boston's most important condo markets for-sale inventory had been dropping for years. More recently, Mayor Marty Walsh has told us that the city needs tens of thousands of homes built. Those homes won't be built overnight. And, when they are, land and construction costs, as well as the desire for profits, means that much of this inventory will be high-priced.

What about the availability of more modestly priced inventory? Let's not forget that while interest rates fell precipitously over the last several years, rents surged almost uncontrollably. As a result, I fear hundreds, if not thousands, of hub property owners are thinking like the commenter who wrote in response to one of my columns, "We bought a condo in Boston last year around this time, and with our low mortgage rate we plan on keeping the place until we die, whether we live in it or rent it out. Glad we got in when we did."

It's a tough situation, but if you think it's too tough, you can always take the advice of another commenter who heartlessly wrote, "If you can't afford Boston, get thee gone and make room for someone who can afford it, there's plenty out there clamoring for the space you're complaining about."
· Our Bates By the Numbers archive [Curbed Boston]