bostonbubble.com Forum Index bostonbubble.com
Boston Bubble - Boston Real Estate Analysis
 
 FAQFAQ   SearchSearch   MemberlistMemberlist   UsergroupsUsergroups   RegisterRegister 
 ProfileProfile   Log in to check your private messagesLog in to check your private messages   Log inLog in 

 
Go to: Boston real estate bubble fact list with references
More Boston Bubble News...
DISCLAIMER: The information provided on this website and in the associated forums comes with ABSOLUTELY NO WARRANTY, expressed or implied. You assume all risk for your own use of the information provided as the accuracy of the information is in no way guaranteed. As always, cross check information that you would deem useful against multiple, reliable, independent resources. The opinions expressed belong to the individual authors and not necessarily to other parties.

Boston's Luxury Apartment Market Could Unravel in 2017

 
Post new topic   Reply to topic    bostonbubble.com Forum Index -> Greater Boston Real Estate & Beyond
View previous topic :: View next topic  
Author Message
Guest






PostPosted: Tue Jan 03, 2017 10:19 pm GMT    Post subject: Boston's Luxury Apartment Market Could Unravel in 2017 Reply with quote

One can only hope...

http://www.bankerandtradesman.com/2017/01/bostons-luxury-apartment-market-unravel-2017/
Back to top
Guest






PostPosted: Fri Jan 06, 2017 4:47 pm GMT    Post subject: Reply with quote

I agree the 'luxury' tier will go down first when the wind turns, due to following:

1. Luxury means high condo fee, which makes it almost impossible to get a positive rental return at current price, despite saying if the interest rate go any higher than now. Usually you can not sell these type of 'Luxury' condo with high price, due to high cost of condo fee.

2. A lot of 'Luxury' condo only looks luxury as it is, but they are in un-desirable locations, such as right next to highway, somewhere in slump towns, far away from the city etc.

3. There are ton of such un-desirably located Luxury condos being build currently, they will load into housing market in the next couple of years. Developers want to maximize the selling price by putting high end appliances and features into whatever development they can get their hands on. People should realize now or soon that rent is not going up crazy like the last few years, it is stagnating if not falling.

How big the domino effect of the fall of Luxury condo tier is still too early to tell yet, it is depends on how bad Yellen could screw up Trump by jacking up FED rate, before she got booted off the FED a year from now. Political idiocy could join force with over supply of housing and higher gas price(sample of living cost goes up), and come out as something that is not containable.
Back to top
Guest






PostPosted: Thu Feb 23, 2017 5:24 pm GMT    Post subject: I share this guy's consternation Reply with quote

http://www.bostonmagazine.com/news/blog/2017/01/27/boston-luxury-condos-video/
Back to top
Guest






PostPosted: Fri Feb 24, 2017 1:35 pm GMT    Post subject: Re: I share this guy's consternation Reply with quote

Anonymous wrote:
http://www.bostonmagazine.com/news/blog/2017/01/27/boston-luxury-condos-video/


Causation does not equal correlation. Luxury condos have nothing to do with rents going up on regular housing. In fact, oversupply of luxury condos should cause rents to go down. What's causing the rents to go up are the hordes of millennials who are starting to move out from their parents homes and rooming with their friends into affordable apts.

You are seeing the same thing happen on the housing market as the older millennials get married, have kids and look for houses, but have nothing decent to buy. There are few decent houses under 500k and tons of houses over 1 million. Look at inventory in West Roxbury versus Wellesley which have similar population size, but Wellesley has 8x more houses for sale.
Back to top
Guest






PostPosted: Sat Feb 25, 2017 8:12 pm GMT    Post subject: Reply with quote

Quote:
Causation does not equal correlation. Luxury condos have nothing to do with rents going up on regular housing. In fact, oversupply of luxury condos should cause rents to go down.

It could. When luxury condos transform the area to a upper scale, people consider the same area a better location, and willing to pay more to live there. Therefore the rent of the area go up. Take a look at south boston as the example for the last 10 years.


Quote:
What's causing the rents to go up are the hordes of millennials who are starting to move out from their parents homes and rooming with their friends into affordable apts.


This most likely a false assumption. In every given year, there will be youngsters moving out of their parent's home. I don't see major population gain in Boston for the past few years. I rather believe the rent goes up due devaluation of money, directly related to QE and Ultra low interest rate. When the cost of building went up, it transforms into higher rent.
Also there are 2 major industries that have very high margin, due to lack of international competition, which supports major part the Boston Economy, and they are the pharmaceutical/medical and higher education. They are the major forces of pushing up rent and home price locally.


Quote:

You are seeing the same thing happen on the housing market as the older millennials get married, have kids and look for houses, but have nothing decent to buy. There are few decent houses under 500k and tons of houses over 1 million. Look at inventory in West Roxbury versus Wellesley which have similar population size, but Wellesley has 8x more houses for sale.



Nothing under 500k meant the base level of housing cost has gone up. Entry level of SFH used to be in the mid 300k, now it is in the mid 500k. This is stagflation, since salary did not get the 60% increase during the same time.
There are tons of houses over 1 million meant there are not much local people can afford housing over 1 million yet. This is a classic example of over priced housing market.
What is going to happen of current housing bubble is all depends on how big the change of interest rate in the future. We are about couple of years away from the popping time.
Back to top
Display posts from previous:   
Post new topic   Reply to topic    bostonbubble.com Forum Index -> Greater Boston Real Estate & Beyond All times are GMT
Page 1 of 1

 
Jump to:  
You can post new topics in this forum
You can reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum


Forum posts are owned by the original posters.
Forum boards are Copyright 2005 - present, bostonbubble.com.
Privacy policy in effect.
Powered by phpBB © 2001, 2005 phpBB Group