Up and Comers Propel Boston Market
David Bates / July 13, 2012-11:01 am
A comparison of the year-over-year condominium under agreement numbers for Greater Boston neighborhoods shows the biggest gainers are neighborhoods once considered substitute, emerging, or up and coming markets. In other words, in the first half of the year markets where development was recently heavy outpaced old reliable markets.
Established markets are the most valuable and sought after neighborhoods, the places where visitors gush, “What a great location!” Substitute, emerging, and up and coming markets are often contiguous to established markets. Their locations are more challenging and may not even have the proper Bostonians preferred method of transport: MBTA train. In up and coming markets it’s not uncommon to see properties renovated to the nines standing side-by-side with properties that may cause passersby to check their cell phone’s 911 speed dial trigger — just in case.
Despite secondary locations and inconsistent curb appeal, emerging markets often lure potential buyers from established markets by projecting a cool vibe and displaying bright and shiny home finishes. As a result, real estate buyers often forgo the safety and stability of envied terrain to purchase at a similar or lesser price newly renovated homes, with more square feet, and superior modern amenities.
Over the last two decades we have seen a variety of Boston neighborhoods turn into “up and coming” markets and then establish themselves. Instead of buying in the Back Bay, buyer’s bought in the South End. In lieu of the South End, they purchased in South Boston. Instead of Brookline, the destination became Jamaica Plain. And instead of a homestead in Cambridge, the place called home became Somerville. An analysis of MLS condominium under agreements shows that in the first half of 2012, under agreements were up 20% versus 2011 and that Somerville, South Boston and Jamaica Plain were among the leaders for the local rebounding real estate market for increases in under agreements. In Somerville under agreements are up 40% year-over-year. The same in South Boston, +40%. Jamaica Plain is not far behind at +36%. Their more established counterparts have posted healthy year-over-year gains, but have not kept pace: South End +26%, Brookline +23%, Back Bay +17%, and Cambridge +9%.
Of the 13 Greater Boston neighborhoods I surveyed, there was only one where under agreements were down for the first half of 2012: Roslindale. But there is hope. A developer doing 15 units in “Rozzy” told me the hot JP market means Roslindale is “up and coming.”