The suburbs to the west of Boston are some of the toniest in the country and the South Boston Waterfront is teeming with luxury developments, but experts say the next real estate markets to blow up might not be the sleeper towns some might expect.
David Bates of William Raveis Real Estate and author of the number-crunching Bates Real Estate Report said he continues to be amazed by the renaissance taking place in and around Somerville, but he said it’s still got a long way to go.
“They just had another $1 million over-ask sale in Cambridge,” Bates said. “For the majority of people who can’t afford Cambridge, that makes Somerville that much hotter. Assembly Row is impacting Somerville. I wonder what will happen as they extend the Green Line. … Now you’re seeing it in Medford. The absorption rate for condos in Medford is 0.5, meaning we could sell the entire inventory in half a month.”
Bates said he attends conference after conference in which experts tell him companies are coming to Boston to try to capitalize on the intellectual talent.
“Where is that?” Bates asked rhetorically. “The bulk of it is near Cambridge. Arlington is hot. Where can you buy a decent single-family home in a good area with good schools and proximity to the city for $700,000? I expect that to continue to be a solid market, but it’s influenced by what’s happening in Cambridge. If you’re a biotech person, where are you going to live?”
Bates said low interest rates, little inventory, stock market gains, and unprecedented international demand are driving prices in these desirable areas, and there is no end in sight.
David Lilley of RE/Max Destiny in Cambridge has been selling real estate since 1982. He said prices in Somerville and the surrounding areas, particularly Union Square and the parts of Medford around Tufts University, are positioned to launch in the next few years.
“Boston condos sell for around $1,200 per square foot,” Lilley said. “Cambridge is now $900 to $1,000, Somerville is around $800, and Medford is a little lower, maybe $500 to $600 per square foot. Medford is poised to take off, especially all along the perimeter of Medford near Tufts with easy access to the Green Line extension. You can still pick stuff up over there if your paying attention.”
Lilley said despite the fact that prices all over Somerville and Cambridge shatter records every year, he sees more room for growth as high-tech companies continue to pour into the area seeking to recruit recent grads from the area’s esteemed universities.
“I think Somerville could be the next South Boston because of the Green Line extension and what’s going on in Union Square,” Lilley said. “They’re going to build another 2.1 million square feet of life sciences development in Union Square. They’re going to create another Kendall Square in Union Square. The Green Line is going to go right up the middle to Tufts, and maybe beyond if they get the funding. We’re seeing it happen as we speak.”
On the south side of Boston, where price growth is a little less explosive, Andrew McKinney of Buyers Brokers Only in the South End said interest and inventory in Weymouth are on the rise.
“Two years ago, you could get a brand-new single-family home in Weymouth for $550,000. Now it’s over $600,000,” McKinney said. “There’s a good amount of new construction there. It’s an emerging market in a very common price point, between $400,000 and 600,000. You can barely get a one-bedroom in South Boston or Dorchester for $500,000.”
McKinney said working with so many first-time buyers means he has to get creative. For people seeking value and not necessarily committed to condo living, Weymouth is a good alternative.
“Inventory has come up quite a bit in the last month or so,” he said. “That’s good for buyers. South Weymouth has commuter rail and buses to the Red Line. I think there’s much more value. There are 44 single-family homes on the market in Weymouth right now. That’s a lot for south of Boston.”
Of course, if Amazon chooses Boston as the host city for it’s much-talked about HQ2, that’d be a real game-changer.