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Boston & Urban Suburban Condo Market; in good shape!
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john p



Joined: 10 Mar 2006
Posts: 1820

PostPosted: Sun Aug 12, 2007 11:45 am GMT    Post subject: Reply with quote

I'd like to think that the guy was telling the truth about buying the condo in the South End. If that is the case, he put his money where his mouth is. Right or wrong move, at least he followed the data he was pushing. If he made money, it might have given him a rosey tint on the lenses of his perspective. You know, I don't fault someone for having a different perspective, I mean he got a lot of other perspectives. I wonder if he thought that everyone else were just "bubbleheads" that had an agenda themselves. My first case study in my MBA was about a losing company with a bad product. All the type "A" personalities had every reason in the world to push this bad product. The lesson was when to cut your losses or to recognize when a product has passed maturity and was in decline. I told the guy that it was risky because the strata of prices below were softening, but I kept asking about the profiles of buyers and try to see if those segments were sustainable. At least the guy is in South End and if he is upside down for 3-4 years its a nice place.

Harry, ask yourself this "You (Harry) were right, how could you have better communicated your points? That's the challenge and the duty of those who can see things clearly, to try to make points so that others that might manipulate or cherry pick can't get much traction.
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john p



Joined: 10 Mar 2006
Posts: 1820

PostPosted: Mon Aug 13, 2007 12:13 pm GMT    Post subject: Reply with quote

I just read the entire thread, 12 pages. The collective here, the posters here are excellent (I'm the biggest meathead hands down). Going through this past season, what handicapped me the most was my own perspective. Now that it is over and I reread everyone elses points again, I can see that if I had a more open mind I would have had a sharper overall perspective. It is clear that people were envisioning different things. I was zeroed in on my own thesis of the digestion process of this asset class like the way yeast rises during digestion. If you can pull your mind out of your own track of thinking you'll have a more powerful perspecive.
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Condo



Joined: 28 Sep 2006
Posts: 50
Location: Boston

PostPosted: Mon Aug 13, 2007 5:08 pm GMT    Post subject: Reply with quote

Hi All,
Been swamped of late, tons of activity in the market, general brokerage in Boston is cooking, numerous new residential projects both in the press and not yet released to the press are motoring forward, have not logged on to this forum since my last post. Love all the theories, love being called a sleaz....its truly fantastic. If this is a bad market .....I hope with all my might it continues!!!! If I'm cherry picking... downtown, emerging, metro west, Norfolk, South Shore ..... then the broad generalizations in the press are guilty of not focusing on the extremely positive aspects of the market. Shame on them ..too bad you have to make an effort to find out what is really occurring. Most people like to get spoon fed...it's easy. It's hard for most to get the real story .... a sad commentary on the press that they don't! Oh ...and yes, I did buy in the South End ... psyched for our place, construction/ renovations almost finished. We made a solid decision, for what we feel is a reasonable price, in a great neighborhood, surrounded by million dollar condos, and we are very pleased with the product that is coming along.

On to a mid year commentary:
Again, the Boston market is trending contrary to recently released MA data, as well as national data. Sales transactions for the Boston Market are basically flat from 2006 YTD ( 1981 for 07 through 7/13/07) and 10% below record year 2005. However, numerous other data points are equal or higher. Absorption, average price, Median price, $1000 sq foot transactions, $1M + sales, % of $1M sales. A great indicator , months of supply, at just above 4 months in Downtown Boston. That's a great figure!! We should establish new record levels in various categories for 2007. Market perception trails market reality and trends fairly dramatically. Do you get your smarts from the Boston Globe? Think outside the local business section articles ..... you may be surprised. Many local markets are steaming along ...... love this business.
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john p



Joined: 10 Mar 2006
Posts: 1820

PostPosted: Mon Aug 13, 2007 5:15 pm GMT    Post subject: Reply with quote

Condo: I think a guy like you would make money in any economic condition. Do you think that all price strata is going up or do you see variation in price strata or neighborhood.
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Condo



Joined: 28 Sep 2006
Posts: 50
Location: Boston

PostPosted: Mon Aug 13, 2007 5:30 pm GMT    Post subject: Reply with quote

I wish that were the case!!! Thanks for the vote of confidence and optimism. I believe that location and demand have much to do with pricing.... not a very complicated opinion. Extremely desirable "affluent" areas will always hold or increase value. As far as a broad generalization is concerned, ( and I only know the local markets well) over a long period of time, there will be volatility, but eventually, there will be upward pressure on prices across all market segmentations.
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john p



Joined: 10 Mar 2006
Posts: 1820

PostPosted: Mon Aug 13, 2007 5:38 pm GMT    Post subject: Reply with quote

Is there any way you could give like a break down like for instance:

300k-450k - down

450k-650k - flat

650k to 850k - significantly up

850k to 1M - very strong

1M - 1.5 - flat

Something like that?
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Condo



Joined: 28 Sep 2006
Posts: 50
Location: Boston

PostPosted: Tue Aug 14, 2007 7:35 pm GMT    Post subject: Reply with quote

2005/2007 YTD ( 1/1 - 8/10)
$0-$499 -- 1390/1303
$500-$999 -- 504/817
$1M-1.499M -- 161/163
$1.5M - $1.99M -- 57/48
$2M-$2.49M -- 28/28
$2.5M-$2.99M -- 12/14
$3+M -- 19/29

Sub 500K segmentation has not disappeared, there is limited inventory in this price range in the downtown market. We are now experiencing all time high data points, across the board, in the sub 500K emerging markets.
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john p



Joined: 10 Mar 2006
Posts: 1820

PostPosted: Tue Aug 14, 2007 7:58 pm GMT    Post subject: Reply with quote

So this is what I take away:

That $500k to $1M price range went wild. Can you see, however, how someone looking at a place under $500k might not have had your perspective? I think some of those new high end condos that got built might have contributed to that supply.

Thanks,

Oh, have you ever been in a $3+ million condo? Mad Dog right?
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Guest






PostPosted: Tue Aug 14, 2007 8:11 pm GMT    Post subject: Reply with quote

http://homes.realtor.com/ ...truncated...
Asking $364,900. Last sold for $395,000 in Sept 2004.

http://homes.realtor.com/ ...truncated...
Asking $368,900. Last sold for $371,500 in June 2003.

http://homes.realtor.com/ ...truncated...
Asking $349,900. Last sold for $372,500 in Aug 2005.

Do these townhomes look like a good deal to anyone, or is it possible they might drop in value EVEN MORE? Why did they sell for so much a few years ago to begin with??

Editor's Note: This post was edited to abbreviate URLs which were widening the page due to the way that the forum software lays out posts. No other changes have been made, and the URLs still point to the original destinations - only their displays have been shortened.
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john p



Joined: 10 Mar 2006
Posts: 1820

PostPosted: Tue Aug 14, 2007 8:32 pm GMT    Post subject: Reply with quote

This price point is like the front lines and will get very bloodied up. This is the bottom price rung that needs to be reachable for first time buyers; and its not. The people that sold to the current owners most likely grabbed like $100k to $150k and bought a starter home for $450k.

Here is the thing to consider: Just as someone can wait it out and rent, these sellers can as well, unless they're screwed with an adjustable.

Just because the see saw is tilted in your favor doesn't mean that things will tumble down to you. If the seller can meet their financial obligations, they will most likely wait it out unless it is advantageous for them to take a loss and get a better gain on the other end.

My position is that you and Condo are both right at the same time, and the behavior on both ends of the spectrums will eventually have a dialogue with each other. I also wonder if the recent supply of new condos has put some downward pressure on the older condos. Further, as the market consumes and digests the new units, I wonder what the supply and demand will be like afterwards. I actually have a friend that sold a condo in South Boston at that price point and bought in the Ritz Carlton Residences. Also, it is interesting to note that although single families are cheaper, it hasn't hurt the volume of condo sales in the $500k to $1M. As another poster mentioned, without a second car payment, a commuter rail pass and the gasoline associated with a long commute and heating oil, a condo might be a better alternative for those who aren't handy or don't have the time for maintenance, etc...


Check out this nice condo...

http://homes.realtor.com/ ...truncated...


Editor's Note: This post was edited to abbreviate a URL which was widening the page due to the way that the forum software lays out posts. No other changes have been made, and the URL still points to the original destination - only its display has been shortened.
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admin
Site Admin


Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston

PostPosted: Tue Aug 14, 2007 8:46 pm GMT    Post subject: Reply with quote

Condo wrote:
2005/2007 YTD ( 1/1 - 8/10)
$0-$499 -- 1390/1303
$500-$999 -- 504/817
$1M-1.499M -- 161/163
$1.5M - $1.99M -- 57/48
$2M-$2.49M -- 28/28
$2.5M-$2.99M -- 12/14
$3+M -- 19/29


Thanks for the data. Would it be easy to add average square feet to each price range for both years?

- admin
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john p



Joined: 10 Mar 2006
Posts: 1820

PostPosted: Fri Aug 17, 2007 5:18 pm GMT    Post subject: Reply with quote

http://www.zillow.com/static/xls/2007Q2_Boston_Worcester_Lawrence_Lowell_Brockton_MA_NH_CMSA.xls

If you go to the third tab "Counties" and look at the aggregate on row 58, how can this percentage be less than the components listed in the three lines below "small", "medium", and "large". Big rise on the high end...
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JCK



Joined: 15 Feb 2007
Posts: 559

PostPosted: Mon Aug 20, 2007 2:14 pm GMT    Post subject: Reply with quote

john p wrote:


Check out this nice condo...

http://homes.realtor.com/ ...truncated...

[/i]


I think it's pretty clear that some of this dialog is missing the mark. I strongly suspect Condo, when he raves about the market, isn't talking about vinyl-sided suburban condos with paper-thin walls. Late 19th century rowhouses in the South End converted to condos and luxury units in the Ritz are attracting a fundamentally different group of buyers from the suburban condo market.
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john p



Joined: 10 Mar 2006
Posts: 1820

PostPosted: Mon Aug 20, 2007 10:50 pm GMT    Post subject: Reply with quote

I get your point, but my point was that if the other poster had put up three or four postings for the $350k range, that you could get a lot more for $350 in Wakefield than in Boston. That place you could walk to the train and be in North Station in about 30 minutes. Wakefield is gorgeous and you don't get mugged and have hookers walking around there. If you want to enjoy the city you can get right in and then go home to a quieter and safer place to live.

http://www.masspike.com/pdf/reports/MTA-Economic-V2.pdf

read page 34, the Millenium Hotel and Condos are built over a large vent for the Central Artery. I'd bet you'd get better air quality in Wakefield than there.

I think Condo's problem is that when I asked him to break down the price structure he gave it to me in 7 categories, and the first category had more units than the other 6 combined. That tells me that you're right, he's thinking about the expensive condos. It takes a certain person to pay for an expensive condo and the people that get a charge from being in the new rich club are exactly the people that these developers target. The key is that in order to acquire wealth you should learn how to preserve wealth and live frugal and not make an unwise decision. If however, you are good at talking people into making unwise decisions that benefit you, than you can get rich that way I guess. I think if a person in the financial industry bragged to their boss or any serious investor about buying an expensive condo in Boston today, I'd think that people would think less of their judgment. The guy that's making a 200% profit selling to the yuppie for the condo in Boston is taking their money to buy a house on King Caesar in Duxbury. What I'm trying to say is that you can look ouside Boston and find a much better quality of life for the money. Again, condo living isn't bad if you have $1Million Plus, but for that money you could get so, so much more in a quiet, safe, beautiful suburb.
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JCK



Joined: 15 Feb 2007
Posts: 559

PostPosted: Tue Aug 21, 2007 1:08 pm GMT    Post subject: Reply with quote

[quote="john p"]I get your point, but my point was that if the other poster had put up three or four postings for the $350k range, that you could get a lot more for $350 in Wakefield than in Boston. That place you could walk to the train and be in North Station in about 30 minutes. Wakefield is gorgeous and you don't get mugged and have hookers walking around there. If you want to enjoy the city you can get right in and then go home to a quieter and safer place to live.
Quote:



http://www.masspike.com/pdf/reports/MTA-Economic-V2.pdf

read page 34, the Millenium Hotel and Condos are built over a large vent for the Central Artery. I'd bet you'd get better air quality in Wakefield than there.


I'm neither suggesting that you don't get more space/fresh air/whatever for your dollar in Wakefield than in Boston. But if it's really so awful, why are people paying a $1m for those Condos?

Clearly, some people are willing to pay for the location, but not others. Some people pay $300/night to stay in a downtown hotel, others pay $75/night to stay 30 minutes outside the city in a bigger room.

Quote:
I think Condo's problem is that when I asked him to break down the price structure he gave it to me in 7 categories, and the first category had more units than the other 6 combined. That tells me that you're right, he's thinking about the expensive condos.


He definitely is. And that narrow slice of the market appears to be doing well. And I also think you're right, that his view is not representative of most people.

Quote:
It takes a certain person to pay for an expensive condo and the people that get a charge from being in the new rich club are exactly the people that these developers target. The key is that in order to acquire wealth you should learn how to preserve wealth and live frugal and not make an unwise decision. If however, you are good at talking people into making unwise decisions that benefit you, than you can get rich that way I guess. I think if a person in the financial industry bragged to their boss or any serious investor about buying an expensive condo in Boston today, I'd think that people would think less of their judgment. The guy that's making a 200% profit selling to the yuppie for the condo in Boston is taking their money to buy a house on King Caesar in Duxbury. What I'm trying to say is that you can look ouside Boston and find a much better quality of life for the money. Again, condo living isn't bad if you have $1Million Plus, but for that money you could get so, so much more in a quiet, safe, beautiful suburb.


Quality of life is subjective and situational though. I live in Cambridge and work downtown. If I moved to Duxbury, I would have to fight my way through traffic every morning and evening and buy a second car. Both my wife and I would have to start paying hundreds of dollars each month to park. Suddenly, all of the money I'm saving on housing is eaten up pretty fast in commuting costs not to mention the time. And, FWIW, everyone I know with a single family home spends gobs of money and time on repairs and maintenance. Good friends of ours just spend over $10k to have their house repainted. They needed a new A/C, there goes another four grand...


I'm not really seeing how any of this improves my quality of life or saves money. And somehow I don't get mugged or see hookers all the time.

Kids clearly change the equation dramatically, though.
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