Today's Globe has a piece about the slow-down in East Boston's real-estate market. It's called "Eastie's sizzle fizzles" with the sub-headline: "The next 'hot' housing market has cooled, and for some that is OK."The story points out that condo sales in this neighborhood jumped 264% in 2005, but then the market weakened statewide and condo sales in Eastie dropped even faster than elsewhere. Some in the community, the article says, feel that this is a good thing:
...the stalling market may have provided a much-needed breather for East Boston, and helped preserve some of the unique flavor of the neighborhood that made it so appealing, including its demographic mix of races and ethnic businesses.The story also notes that:
The neighborhood has seen marked improvements in recent years -- there are more owner-occupants on every block, and they are spending money fixing up their new homes, filling flowerboxes, and adding other touches that brighten the streetscape, he said. Storefronts are full, creating a vibrant urban village.
18 comments:
Starbucks near Maverick Square projected? What does that mean? And where would it go?
Though it isn't my favorite idea, it would help the real estate market some. Let's face it, a Starbucks screams up-and-coming.
All in all, not a very informative article, and frankly a misleading headline. The second half was the real story. A gradual gentrification is occuring with housing improvements, more owner-occupancy, and an active (if limited) retail environment.
And I think it's a good sign that Roseland/Lennar as well as Clippership intend to start off with apartments first. It's a better market right now, and will still bring a greater number of people to the area and help spur a greater mix of retail offerings.
Starbucks will come only if and when their market research shows that they can make money at Maverick Square or anywhere else in East Boston. The same goes for McDonald's, Burger King or any other eatery. They know when a spot becomes profitable based on who is living there and who passes by.
This journalist is very irresponsible. Her fundamental assumption is mathematically flawed yet she persisted to bash Eastie in spite of it. She says in the article "Sales here fell 30 percent in 2006, compared to a 10 percent decline citywide. And so far this year, condo sales in East Boston are down nearly 18 percent, but are flat citywide."
However, if you look at the chart included in the Globe article, the -30% is the "decline OVER the previous year." The reporter just changed the language in the article to fit her point. 2005 was up 264% in Eastie. So condos sales were only off 30% after having increased a striking 264%. This is really not a bad thing. If condo sales had increased at the same rate in 2006 OVER 2005, then we would have been looking at 300% or more for 2006 which would be extremely high for a two year period and probably unhealthy for the market.
Here are the numbers (as opposed to the percentage) of condos sold in Eastie according to public registry records. 156 Porter sold 200 condos over 2005 and 2006 in one building, so in order to accurately reflect the overall condo market I also gave the condo numbers excluding first time 156 Porter sales.
(Disclaimer - I used the MLS public registry search and I am relying on its accuracy. I cross checked with MLS listing results and these numbers seem to be very accurate):
2003: 39
2004: 66
2005: 261 total, 126(excluding 156 Porter
2006: 210 total, 149(excluding 156 Porter)
2007 (Jan 1-Sept 7): 139
The total number of condo sales in 2006 actually WENT UP if you exclude all 156 Porter sales! After 8 months of 2007, non-1st time 156 Porter condo sales are HIGHER than the banner year of 2005, and are almost even with total 2006 sales. And all this in the worst real estate crash since the 1980's is pretty good news.
I am in the real estate business, and I know some of the people interviewed. I was told that she came up with the name of the title for the article before she started interviewing sources. She only took the quotes that helped her prove her thesis and disregarded everything else (even though several of the interviewees strongly disagreed with her premise!)
Also, the developer who was the centerpiece of her article (the brick rehab on Cottage St) was a poor choice because he has been trying to sell average quality condos in the middle of construction. It is very difficult in a down market to sell condos at full market price until they are finished, whether in Eastie or Cambridge or Back Bay. This developer made bad choices and his experience is not representative of other developers in Eastie.
I know this happens all the time with newspaper reporters, but it is so disappointing to see how a reporter can manipulate data and really hurt people on a whim. I am feel really bad for all the small developers and real estate agents with so much invested in the Eastie market. I doubt the NY Times or WSJ would have let this article through. Hopefully someone will liberate the Globe from NYTimes control and make it a respectable paper again.
True Jimbo.
I just think East Boston is doomed.
Thank you, James, for that informed and reasoned assessment of the real estate situation in East Boston. As you indicate, the 30% drop is relative to the 264% rise the year before. While there is no doubt that the market has cooled, there have still (according to the stats you furnish) been more condos sold in Eastie this year than 2003 and 2004 combined.
On a journalism note, reporters at big papers like the Globe do not write the headlines to their stories. Those come from copy editors, who read the story and then come up with a headline that fits in the space available.
Jimbo,
Your right to point that out. I didn't mean that she came up with the headline, but more that she came up with the thesis for the story beforehand. That is what I was told by some of the people she interviewed (or failed to interview because they refused once they found out what she was trying to do).
I should have also clarified that it is obvious that the market is in a big slump throughout Boston and the rest of the country. I just don't think the numbers indicate this situation is so much worse in Eastie than other areas. I would argue that sale prices in Eastie have/will be dropping, but I think overall numbers sold will be solid because we are the last safe and convenient neighborhood with condos affordable to the average working professional or family. If she had taken the sales price angle instead of the total sales angle, she would have found better data to support her goal.
I just get so frustrated with the blind Eastie-bashing from the other side of the Harbor. All my non-Eastie friends and acquaintances can't stop talking about all the supposed crime here even though we consistently rank at the 2nd or 3rd lowest crime rate (property and violent) in the city. Now they are going to really get on me about the real estate market based on one article. You will notice that this is one of the top emailed articles in the Boston Globe today last time I checked.
I have to say I have a different view of the project changes by Roseland and Lennar. While it may be more profitable for these developers to put up rental units first, experience in Beacon Hill and the North End worries me. My experience is that in rental communities, many of the residents are transient and do not have the same concern for their property or their neighborhood that owners would. Creating more rental units, delaying any park / emerald necklace projects and holding off on the retail and restaurant spaces in these developments will not attract the businesses and services that we would all like to bring to Eastie. Without these attractions it will be hard to attract new residents who share our interest in and concern for the community. This editor's title, and the characterization of the statistics does us a great disservice.
The Globe did a similar thing with our election. They wrote several articles but really only wanted to focus on Gloribell. The other three candidates were barely mentioned. If real estate is location, location, location then the newspaper was agenda, agenda, agenda.
Typical Globe article. Focus on the minority candidate.
I agree that owners tend to care more about their neighborhoods than the "transient" renters described in an earlier post. However, hot up-and-coming neighborhoods rarely start out as a prospective owners paradise. The renters, aka gentrifiers, especially those that would live in these new waterfront buildings, would bring in valuable spending dollars, which typically bring in greater numbers of businesses to serve the public, which often gives prospective buyers a better impression of the neighborhood, which makes them more likely to buy. And luckily, the numbers have shown many have been buying in Eastie the past few years, and the rehabs are evident in many areas. So, that's a win-win. The rental portions are only being built first because they are financially viable in this market. Once it rebounds, the condos would likely follow, because they will offer more bang for the developers buck.
I do think, however, that the park space should be required with the start of the rental building. At least a portion of it. It was part of the deal to develop the property. The City should require it to be part of Phase I.
"Starbucks screams up-and-coming..."
Screw Starbucks. Eastie should proudly stay a non-cookie cutter neighborhood. The other neighborhoods have been slowing stripped of all personality in the past 15 years. Don't let it happen here.
IT's been proven folks, an example chelsea a bridge away, East Boston a tunnel away,South Boston walking distance to financial district,which neighborhood would you rather live in S Boston RIGHT.Chelsea's admirals hill with the view and the marina and a bridge away from Boston was on everyone's mind 25 years ago,most of the units today are section 8's, If it did not work out for chelsea what makes you think East Pier would work out for East Boston
A student at Salem State college did an analysis of the locations of Starbucks versus Dunkin Donuts. There was not an important difference in income in the places that have Starbucks or Dunkin Donuts. The most important differences appear to be average housing values, race, and education. In short, Starbucks appears to be located in communities with higher average housing values, larger proportions of Asians, and larger proportions of people with college degrees. You can check it out here:
Starbucks and Dunkin Donuts
The student did not perform any statistics that would show if the correlations are significant. If they are, East Boston is probably not going to be getting a Starbucks anytime soon, which is fine by me. I'd much rather have more places like 303 than Starbucks.
To Anon
Starbucks is not a making of any neighborhood ,anywhere!
The making of a neighborhood is
1-Low Crime rates
2-Excellent schools K-12
3-Diversity
4-Clean ,respectable shopping areas
5-A political landscape that is equal,and accessable to everyone
Starbucks coffee is the worst anywhere.
,and if you are betting where you live based on if there is a Starbucks in the area,you are in big trouble.
Those Lofts at the old G.E. building,are great "if you like one giant room".Thats what they are.No walls.
They cut out about 80% of the buying market by doing that.Most people buying are families.
What happens if you have kids?
No walled off bedrooms? Yuk.
I guess you would have to go on the roof to make whoopi!
Why did the YMCA on Bremen St raise there fee's from $40.00 to $55.00 with a $100.00 advance membership fee,are they all right!
Do they think East Boston is Belmont, Folks , the per capita household income in East Boston is under $45,000 if the YMCA can not appeal to the average residents of East Boston they should not do business in East Boston at all.
Joe:
Again, more ridiculous commentary on your part.
BooBoo
EastBostonRules
Says to Anon
The only thing that is ridiculous is that you are afraid to sign your real name.Have a nice day!
For every Action,there is a Reaction.
Nuff Said !
Joe Mason
I'm a relatively recent owner in Eastie and I had to do massive research before buying. If you look at the past 20 years of home values in east boston you'll notice that the rollercoaster spikes and dives essentially level out over time to still be a solid investment here. If you can hold onto your condo for 7-10 years, I'm sure anyone here will be just fine. If you are a flipper and plan on 2-3 years then yes, you're currently looking at a loss. It is inevitable that eastie will slowly "gentrify" over the next decade because as the article accurately stated, "East Boston is the last bastion of undervalued property in Boston."
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