Every week, we ask a real estate professional for their thoughts on the top trends in real estate.
This week, we talked with Myrna Rothman, senior vice president at Otis & Ahearn Real Estate.
Boston Agent (BA): A recent analysis from BiggerPockets, a large online hub for real estate investors, named Boston one of the worst cities for real estate investors. Do you agree or disagree, and why?
Myrna Rothman (MR): I totally disagree due to our extremely strong market fundamentals. We have very limited land and a lengthy and costly approval process, which dramatically limits inventory. The old adage of supply and demand in Boston certainly applies. It can take up to three years to have a project come to fruition, and buyers love that new product. The majority of investors are conservative and financially strong local buyers. We do have a small, but increasing, percentage of international investors, and those purchasing are typically for their college-age children who want a nicer place to live in during their four or five year Boston stay – with an added bonus of building equity. Our investors are usually longer term than in most cities, so again that reduces our inventory.
BA: How important are international buyers and investors to Boston, and do you expect that influence to grow? Why or why not?
MR: The international buyer is becoming more and more an integral part of the growth of our city. At this point in time, 3 to 5 percent are international buyers and this will increase for many reasons. One of the big reasons for this trend is that there are direct flights from parts of Europe and Asia that are now being offered to Boston, which were not available in the past. This encourages parents from overseas to allow their children the opportunity to go to schools with strong academic credentials. Boston is known as the “gateway city” and promises to welcome all!
BA: Boston and Midtown’s luxury markets have been growing recently. What is it about these markets that separate them from more staple luxury markets like New York and Miami?
MR: Boston is a small, walkable city that is very easy to navigate, unlike New York and Miami. Boston is basically a primary home market. People live here, work here and enjoy the offerings of a small city environment. We have new buildings going up in Midtown that rival anything that can be offered in other cities, and at prices that will seem reasonable compared to New York. Boston’s Midtown is becoming a neighborhood with all you’d expect – a supermarket, great restaurants and walkable medical facilities. Miami has certainly done well in the past few years, but it is still considered a second home market for those trying to escape the northeast winters. There are the tried and true New Yorkers who will never leave, but most people can only take New York for a certain number of years – it is huge, complex and very expensive per square foot. You need a certain income level to live there comfortably. Boston is stable and often compared to San Francisco without hills. I believe that Boston just offers a warmth that New York and Miami can’t match!
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