Highlights from the Boston Real Estate Now blog.
Today’s majestic waterfront home could very well turn out to be tomorrow’s underwater wreck.
Sea levels along the Massachusetts coast are expected to rise 2 to 6 feet over the course of this century. In fact, they have already risen by nearly a foot over the past century.
More powerful and destructive storms like Sandy have already ripped apart sections of the coast, wiping out waterfront homes in hours.
So what happens to all those waterfront homeowners?
One proposal, being pushed by the head of the state Senate’s global warming and climate change committee, could be the first step toward a taxpayer-funded bailout. Senator Marc Pacheco, a Taunton Democrat, recently unveiled a wide-ranging bill that envisions, according to The Republican, Springfield’s daily newspaper, “a coastal buy-back program, which would authorize the state to acquire, from willing sellers, properties located in flood plains, containing structures damaged by weather or in areas near tides. Those properties would be used for conservation or recreation.”
Interestingly, Pacheco left a price tag off the bill, advancing only the nebulous idea that existing state funds could be redirected to pay for the initiative.
Of course, it doesn’t take a rocket scientist to figure out the potential cost of this buyback plan could easily escalate.
And should all waterfront homeowners be eligible? If you have someone who throws caution to the wind and builds their multimillion-dollar dream near where erosion is stripping away the coast, should they get bailed out?
Then again, what about homeowners on Plum Island, many of whom bought or built modest homes on lots that years ago seemed safely tucked back from the beach, only to have waves lapping at their doorsteps now?
The great 2014 home selloff?
Stocks are tumbling. Is the great investor real estate selloff next?
Wall Street investment funds and mom and pop operators alike have spent years vacuuming up distressed homes across the country.
Now with prices rising by double digit rates, investors are looking to cash in. In practical terms, that means they are going to start dumping these one-time foreclosure specials on the market in 2014 and beyond, a panel of 110 economists and real estate forecasters surveyed by Zillow finds.
That could be good news for buyers as the spring market approaches, potentially cutting down on competition from cash-rich investors while putting more listings on the market.
The impact is likely to be a bit more muted in Greater Boston, where the big investment funds never really arrived, though we have certainly had our fair share of activity by smaller operators.
Nearly 80 percent of the panelists surveyed said they saw investors stepping down their buying activity in 2014, with 57 percent predicting that “investors will have sold the majority of homes in their portfolios” over the remainder of the decade, Zillow reports.
Asking prices for condos on the rise
Condos have long been a starter home alternative here in Massachusetts, the land of perpetually increasing home prices. But condos are suddenly not looking all that affordable now. The median price statewide hit $300,000 in January, the Massachusetts Association of Realtors reported recently.
Just last January, the median price was a considerably lower $250,000, so we are talking about a 20 percent increase, according to the real estate trade group’s monthly report on pending sales.
Sales were up as well, jumping nearly 10 percent to 1,421, the most condos to get new owners since January 2007.
Of course, this is a statewide median, so we have to take into account all those multimillion-dollar condo sales in Boston, which are certainly helping push up the numbers.
Still, that’s hardly a reason to dismiss the report, either. Few new condos have been built over the past few years in the Boston area, with banks having shut down financing of new projects after the recession. So scarcity is a factor in these price increases.
By contrast, pending home sales rose just 1.5 percent this January compared to first month of 2013, with the median price, at $320,000, essentially unchanged from December.Scott Van Voorhis is a freelance writer who specializes in real estate. For the full Boston Real Estate Now blog, visit www.boston.com/realestate.