4 reasons city's core weathered recession better than state
Thirdly, the downtown market is underleveraged; in 2010, about 30 percent of buyers paid in cash. Fourthly, downtown Boston boasts a diverse cross-section of jobs.
As a result of all that, the downtown Boston residential market behaves quite differently from the rest of the state.
I also checked in with Timothy Warren, whose Boston-based company, The Warren Group, publishes a monthly report on Massachusetts single-family home sales.
"Massachusetts started earlier into the recession, but didn't fall as far as the rest of the country," Warren reported. "Home prices declined about 20 percent from peak."
That apex came in 2005, when single-family median prices for the state hit $355,000. By the end of 2009, the decline finally halted at $285,000. Today, the median price has clawed back to $298,000.
The real difference between Massachusetts in general and downtown Boston is that the latter's stability is the antithesis of what has happened across the state.
Starting in July 2009, the state experienced 12 straight months of increased sales volume -- mostly due to tax credits. When the credits ended, sales volume hit a wall. As an example, November single-family home sales declined 29.8 percent from the same month the year before.
The only good news in that data point was that sales were higher than November 2008 before the mad rush to buy with the tax credits.
Warren is cautiously optimistic for 2011. "There's some pent-up demand for people who postponed a home purchase or a home sale," he said. "Improved job numbers would give people a lot more confidence to go make real estate deals."
That's a sharp difference to the prognostications of Ahearn, who even sees good news in the cheaper segment of the downtown Boston market.
"We're seeing a broad holding of values across all segments, if not upward pressure on pricing on the lower end ($499,000 and below)," he said. "The small-unit market has very high yield. You look at the studios and consistently see deals at $700 to $900 a square foot.
Steve Bergsman is a freelance writer in Arizona and author of several books. His latest book, "After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade," has been ranked as a top-selling real estate investment book for the Amazon Kindle e-reader.
|Contact Steve Bergsman:|
|Letter to the Editor|
What's Your Home Worth?