Elizabeth Gibby-Homnick is senior sales agent with The Charles Realty working in Boston.
Every week, we ask an Boston real estate professional for their thoughts on the top trends in Boston real estate.
This week, we talked with Elizabeth Gibby-Homnick, a senior sales agent with The Charles Realty.
Boston Agent (BA): Are Boston’s persistently low inventory levels hurting the number of investors interested in buying the city? Why or why not?
Elizabeth Gibby-Homnick (EGH): In my opinion, low inventory is not necessarily hurting the number of investors interested in buying here, rather it is changing the profile of the investor, and influences who buys and what their objectives might be in doing so. More specifically, low inventory has created an opportunity for investors with the capital necessary to purchase in today’s real estate market. Investors paying cash often have an advantage over those who are financing, which include both investors and owner occupants. Paying cash a few years ago could sometimes mean buying property at a discount, but in today’s extremely competitive market, with multiple offers on most listed properties, cash is the preferred option for both investors and owner occupants. More often than their counterparts, many investors are in a position to pay cash, creating a unique opportunity for them in Boston.
BA: The median home price in San Francisco right now is approximately $1 million. With affordability quickly leaving Boston proper, and considering your experience in both markets, is there a chance Boston is heading in the direction of San Francisco, where some experts might say the market is overvalued?
EGH: Although property values continue to rise in Boston, I don’t think it will eliminate the enthusiasm for real estate investing here. Both cities are quite unique and I find it interesting that several of my investor clients have either owned or currently own property in both San Francisco and Boston. They recognize the similarities between the two locations, which translate into economic stability, employment opportunities and diverse populations.
Boston’s concentration of financial services, tech and biotech companies, combined with the some of the world’s most prestigious educational institutions and leading healthcare providers, equals growth and opportunity. Our unique history and proximity to Europe, New York and Washington, D.C. attract varied demographics who are often pleased with what they find here.
BA: Do you believe buying a home is still the best long-term investment? Why or why not?
EGH: Yes, I do believe buying a home versus renting a home is still preferable for long-term investment. Why pay your landlord’s mortgage as a renter when you could pay your own mortgage and reap the tax benefits as an owner? “Pride of ownership” stills plays a major role in the appreciating value of properties and communities where they are located, serving as an investment with arms reaching far beyond that of the property owner.
Perhaps a more relevant point relates to the type of property a homeowner buys: single-family versus condominium versus muti-family.
Ownership of these three different property types translates into three vastly different financial and non-financial experiences.
Which one a buyer chooses and why is based on their investment objectives and personal preferences.