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Commonwealth Cooperative Bank
Rooney Real Estate
February 20,2014

SB Real Estate: Both Scarce and Hot!

By Rick Winterson

Going into 2014, many factors - one key factor being a very low inventory of property on the market - have combined to elevate housing prices.  Overall, residential real estate in South Boston continues to be among the most active and attractive in Massachusetts and nationwide.

    Perhaps it’s best to begin with a discussion of South Boston’s inventory of residential housing stock, since its low level is a key reason for the rapid turnover of properties in our neighborhood.  Some figures first:  As of the start of this holiday week (essentially as you are reading this), South Boston has 51 condominiums on the market, and another 106 under agreement; 6 single-family residences on the market, and another 4 under agreement; 4 multi-family residences on the market, and another 5 under agreement.
    That’s a total of 61 residences of all kinds available for sale in South Boston right now – February, 2104. 
    Compare this current stock of homes to last year, 2013, when over a thousand residences were sold in South Boston.  The total of 61 residences on the market is roughly about three weeks’ worth of housing at last year’s residential sales level – a very low inventory.
      According to Jackie Rooney of Rooney Real Estate, housing inventory of 13 weeks or three months is about right, and has averaged this since 2000.  There’s an oversupply of homes only when inventories climb to five or six months’ worth.  When asked about all of the new construction (mainly condos), Rooney says, “The rate at which new homes are coming onto the market, even though it’s a large number, is easily handled by the great demand for residences in South Boston.  I expect low inventories will continue for the rest of this year.”
    Another key factor in South Boston’s strong residential real estate market is sheer demand from those people anxious to buy a home here.  Home sales of all kinds rose to 1,013 in 2013, the second most active year in recent South Boston history (the record year was 2004 at 1,111 homes sold).  And Rooney says, “I fully expect that 2014 will set a new record for home sales.”
     Since the recession officially ended in 2009, the number of home sales has risen steadily from around 650 per year to the present level of 1,013 mentioned above.  That’s an average volume increase of more than 10% per year; the largest increase was 35% (!) in 2012.  The real estate business in South Boston has been very brisk, to say the least.
    And prices have gone up with the rapid increases in demand.  That’s basic economics and a real estate fact-of-life.  Good news if you’re the seller; not so good if you’re the prospective buyer.  Jackie Rooney calculates that average prices of all types of housing rose by 13% last year, after a 9% increase in 2012 – a total of 22% in two years.
      South Boston Online apologizes for using so many figures, but we feel these figures are necessary to give you a graphic picture of what’s going on with South Boston’s residential real estate.  But what are the reasons for our very strong real estate scene?
    First, and perhaps most important, South Boston has always been an attractive neighborhood in which to live.  We have one of the lowest crime rates of any major neighborhood in the City of Boston.  And, yes, that statement includes places like Back Bay, Beacon Hill, and the North End.  Increasingly, South Boston has attracted fine dining, upscale stores, and novel activities.  We have miles of excellent urban beaches.  In fact, South Boston is a maritime community, with borders that are 80% salt water.
     Second, young, well-educated professionals are moving here in droves.  They are well-off, enjoy a busy social life, and are increasingly active in our community.  As a rule, they care about our quality of life here.
    As another reason, are you aware of how many civic groups, athletic clubs, and cultural institutions there are in South Boston?  These are a definite attraction also.
    For financial information, we contacted David Eckel, Loan Officer at Guaranteed Rate, the number one purchase lender in Massachusetts.  He tells us, “Mortgage rates are holding in the low 4’s for a thirty-year fixed … from a historical perspective, still a very good rate.”  Eckel also mentioned a great product for a buyer in South Boston:  A seven-year ARM with rates in the high 3’s.  “We still see a tremendous demand for the spring market,” according to him.  (Contact info:  deckel@guaranteedrate.com; 617-532-3979)
    (Jackie Rooney of Real Estate is the premier seller’s agent in South Boston and has been the top agent in South Boston 25 of the last 28 years. He can be reached at 617-269-1000 and at JackieRooney-Re.com.)



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