Highlights from the Boston Real Estate Now blog.
Everyone knows downtown Boston is hot. If you want to live in the Back Bay, South End, or Beacon Hill, being a millionaire is not required but definitely helps.
But the price increases are now starting to hit the Hub’s working-class neighborhoods as well, with Dorchester, Roxbury, East Boston, and Mattapan all seeking big increases.
There was a time you could buy a foreclosed home or condo for $50,000, but those days are on the way out, which is a good thing. The foreclosure crisis that once hammered urban neighborhoods across the state is tapering off, with foreclosure filings by lenders down by nearly 70 percent across Massachusetts, the Warren Group reports.
The median sale price of a house in Dorchester during the first six months of the year hit $300,000, up more than 29 percent over 2012, Warren Group numbers show.
Roxbury home prices surged 40 percent to a median price of $323,750, while East Boston is a just a shade below $300,000 after a 25 percent boost.
Mattapan is getting in on the action as well, with a median home price now of $250,000 after a 35 percent rise.
While prices are up, sales are actually down, another sure sign of the shortage of homes we are seeing across the state, whether it’s Dorchester or Wellesley.
Fewer homes up for grabs
This is bad news for anyone terrified that home and condo prices may be spiraling out of control once again. Listings of homes and condos for sale are likely to keep falling into 2014, when the inventory shortage may finally hit bottom.
That’s the word from Calculated Risk’s Bill McBride. Inman News caught up with the economics blogger. The former tech executive, who was out front in calling the housing bubble in 2005, doesn’t see the shortage in housing inventory hitting bottom until next year.
In fact, when you look just at existing home sales the number of listings has plunged by 20 percent over the past 15 months, McBride told Inman News.
That’s a jarring contrast to some of the happy talk we have been hearing from more market-driven real estate industry groups and players, who are predicting a leveling off of prices as more sellers enter the market.
A lot of this seems suspiciously like pap aimed at preventing frustrated buyers from bolting the market — and trying to scare would-be sellers off the fence.
We face an even tougher situation here in Massachusetts, with new home construction only slightly above the record low hit in 2011, when fewer than 5,000 single-family home permits were issued across the state.
Builders aren’t riding to the rescue, with most Boston area towns and suburbs highly resistant to new housing of just about any type, except maybe teardowns to make way for McMansions.
The inventory crisis is only going to get worse before it gets better. And who knows where prices will be by the time that happens?
Central air equals cold cash
I’m kicking myself after reading a Wall Street Journal piece on the higher resale value of homes with central air.
No, it’s not just a Florida thing, with the average listing price of homes across the Northeast with central air about 50 percent higher than those stuck with bulky window units.
The average listing price for a house with central air in the Northeast is $359,900, compared with $239,900 for homes without, the piece notes, citing Redfin numbers.
I guess Karen and I blew it when we renovated our Natick fixer-upper back in 2008/2009. While we put in a new gas-fired heating system, we balked at spending another $10,000 or $11,000 for central air conditioning.
Believe me, I think about it every time there is a heat wave.
I guess I feel slightly better knowing that I am in the majority — just 36 percent of homes in Northeast have central air. And while it gets hot in the summer time, it goes fast — we have about one more month, if we are lucky, of fair weather before it turns chilly again.
All that said, the resale numbers are probably skewed by other factors. New homes are much more likely to come with central air than older homes, and, as we all know, new construction carries a premium.