Don’t Quote Me on This, but…

These are dangerous times to be a purveyor of good news. Not just because people now take tremendous glee in predictions of doom (see the French Toast Alert System), but because delivering good news on record has a way of coming back to bite you in the butt. For example:

“…we see no serious broader spillover to banks or thrift institutions from the problems in the subprime market…”

- Ben Bernanke, Federal Reserve Chairman, May 17, 2007.

That having been said, I want to reiterate my personal faith in housing markets in this area, despite any repercussions of Wall Street’s ill-advised flirtation with the mortgage industry. Take a look at the the state’s largest employers, and let’s focus specifically on the city of Cambridge.

The largest employer, MIT’s Laboratory of Nuclear Science, is supported largely by funding from the United States Department of Energy; I think it’s safe to say an icy credit market won’t make too big a dent in their bottom line.  The next largest, the Research Laboratory of Science, should be similarly isolated from the market.

The next two largest employers are MIT (its academic portions) and Harvard; one is the foremost research institution in the world, and the other has been described as a 37 billion dollar hedge fund with tax-exempt status.  While you could argue that higher rates on student loans and less private sector donation to academic research might hurt their bottom lines, I’d expect to see Angelo Mozilo panhandling in Harvard Square before the Crimson Entity starts cutting jobs.

If someone simply has to suffer from the recent downturn, I’d suggest smaller start-ups in some tech sectors might find themselves strapped for start-up capital. Then again, the state did just send them a billion-dollar check, and reports still find a shortage of appropriately well-trained workers, indicating continued growth.

At any rate,  I wouldn’t expect too much shake-up in the value of homes in Cambridge in the near future. There are too many employers, too many services, and too much fun stuff to do.

131 Magazine St #3
Cambridge, MA 02139
3 beds, 2 baths
1,460 sq. ft.
$600,000

87 Bristol St #3B
Cambridge, MA 02141
1 bed, 1 bath
797 sq. ft.
$339,000

 54 Lee St #3
Cambridge, MA 02139
3 beds, 1 bath
1,260 sq. ft.
$569,900

The Best Condos in Boston are on Marlborough Street

Boston Sweet Digs Home

No Bailout — Holy Cow!

Leave it to the House to have the guts to say what’s on everyone’s mind.

Yesterday’s rejection of the proposed bailout of…well…everything but insurance giant AIG (been there, done that) was a complete shock. The Dow dropping another 700 points went right along with it. But what does it mean?

First, it’s a giant vote of no confidence — no confidence in this President’s economic policy, and no confidence in the people who shaped that policy. Both sides want to blame the other for the failure and resulting crash, but if you look at the breakdown of votes, both parties are strongly represented on both sides of the issue.

Finally — something to bring this nation together….

The pressure put on lawmakers by their constituents cut close to the bone. The bailout may be necessary to avoid the New Depression, but with a secretary of the treasury asking for immunity from investigation, prosecution, and pretty much all oversight — sure, he took that part out after a while, but what voter/taxpayer isn’t going to raise a stink after hearing that?

It’s not only a mismanaged economy, but also a mismanaged PR campaign.

Both presidential wannabes are calling for us to regroup and try again before it’s too late (while Ms. Palin heads to Walmart for a few more cases of drinking water and ammunition). That’s interesting in and of itself — this is a wildly unpopular issue, and if they really thought we could get away without it, one or the other would jump on the no-bailout train to victory.

Why aren’t they? Because not doing anything is what got us here, and in order for increased government regulation to work, we need to preserve the stuff we regulate.

Bill Clinton had some really interesting takes last week on the Daily Show — most notably, he believes that if we buy up this paper and use the resulting power to rewrite bad mortgages and keep people out of foreclosure, the taxpayers will end up making money on the bailout — and he cites a similar bailout at the beginning of the last century as evidence. Essentially, use the big bailout to bail out the little guy, and consumer confidence increases and the market works again.

I seem to remember someone saying something similar not that long ago….

The good news is, we don’t actually have to act now — our lawmakers don’t have to vote on yet another bill they haven’t had time to read. The turmoil on Wall Street is Wall Street’s own enormous, ugly baby, and the people most hurt by this are the people who benefited from the influence peddling that got us here.

For now. But there has to be some real economic stimulus, and another fat government check for all of us isn’t going to make it happen.

Forget Bailing Out; Just Move To Greater Boston

Boston Sweet Digs Home

The image above links to its source

The Best Condos in Boston are on Marlborough Street

My bike is down for repairs at the moment, so I’ve been spending a bit of time on T. On a Red Line train from Harvard today, an ad read “The Best Condos in Boston are in Marlborough”.

I didn’t catch the name of the company selling these places, or their website, but it really brought me back to Pamela’s post from earlier today. How much longer are people really going to salivate over the suburban dream?

Sure, refurbed factory condos in the center of Marlborough offer households without children many of the things city living allows: a few services with walkable proximity, a couple interesting shops, and somewhat-diminished carbon footprint from owning part of a building, instead of an entire property.

But while these features even come without some of the less-desirable elements of city life (parking hassles, noise, crime), you’re still stuck in traffic for events in the city proper: the best hospitals in the country, Red Sox games, concerts at the Garden, fireworks and the BSO on the Fourth, New Year’s Eve in Copley Square, tastings at one of the best microbreweries on the East Coast, and plenty more things besides.

Spacious and inexpensive condos from Weymouth to Needham to Marlborough to Lawrence are always tempting, but with the cost of gas going up, and the time I have to deal with hassles going down, a location as central as I can afford is always going to win out.

Having said that, Marlborough Street remains just a touch out of my reach—though a few more down days on Wall Sreet and the duck-and-cover asset management strategy I adopted last August might just get me there.

240 Marlborough #2B
Boston, MA 02116
1 beds, 1 bath
515 sq. ft.
$359,000

371 Marlborough #4
Back Bay, MA 02115
1 bed, 1 bath
843 sq. ft.
$549,000

121 Marlborough St #5
Back Bay, MA 02116
2 beds, 2.5 baths
1,174 sq. ft.
$1,350,000

How It All Began, Almost a Decade Ago

Boston Sweet Digs Home

Photo: flickr user dehub, under cc-by-nc-sa-2.0.

The Future of Housing? It Could Be Brighton.

I spent a rainy, gloomy weekend indoors on the couch, catching up on my reading. One of the books I picked up was in the news a few months back, but I’ve been pretty busy, and just got around to it, so you’ll have to excuse me.

Basically, its about the future of housing — a future, I was surprised to learn, that looks a lot like Brighton.

According to Christopher B. Leinberger, author of “The Option of Urbanism,” social, demographic, environmental and economic trends are conspiring to dramatically change the type of housing we’re likely to see get built in coming years. The fundamental driving factor of the change will be the growth in households without children. The additional 28 million childless households by 2025 (compared to only an additional 4 million households with children) will not be looking for quality public schools or single-family homes on large lots, but instead for dense neighborhoods with shops, public transportation and other amenities, all within walking distance. Leinberger says an unacknowledged pent-up demand for this “walkable urbanism” already explains the current and growing price differential between a house or condo in neighborhoods like the South End or Back Bay and houses or condos further out in car-dependent suburbs like Dedham. Even with the economy tanking and the housing boom busting, this fundamental trend is likely to continue (perhaps even accelerate) which will likely bolster prices in key urban neighborhoods and towns.

You may have heard this before from sustainable housing advocates and the like, but what gives Leinberger’s position some weight is that he’s no pie-in-the-sky idealist. Yes, he’s Director of the Graduate Real Estate Program at the University of Michigan, but he’s also a real estate developer with his own real estate firm. He thinks in terms of cold hard numbers and what sells.

And what’s selling? Compact townhouses, condos and other multi-family homes in places that sound a lot like Brighton. Between now and 2030, he thinks it’s likely that prices in these urban areas will continue to hold steady or drift upward, simply because of high demand and short supply, while prices of large-lot suburban single-family homes will drift downward.

Given his emphasis on the growing segment of households without children, I would like to throw in a prediction of my own: affordable urban walkable neighborhoods like Brighton will grow in value relative to walkable but more expensive towns like Brookline, which have traditionally attracted residents largely because of a quality school district. There may simply be fewer folks able or willing to pay high housing prices and property taxes for walkability and a good school district if they can find essentially the same thing without the good schools in a cheaper neighborhood next door.

Interesting reading and food for thought on a rainy day.

Forget Bailing Out: Just Move to Greater Boston
Boston Sweet Digs Home

Hitting the Links

• Take your kids to work MBTA-style. [Michael Critz]
• What defines a bedroom? [Boston Real Estate Blog]
• How to stage that second bedroom. [Home Staging Blog]
• Seafood in Chinatown: Peach Farm Seafood is worth the trip. [The Chinatown Blog]
• The East Boston market took a hit. [Tony's Realty]
• The W Hotel in the Theatre District seems to be making progress, but people are still up to no good at 7-Eleven across the street. [The Beantown Blogger]
• It’s good to see T employees putting out their best efforts. [Universal Hub]
• Desperate times call for desperate measures, but sometimes desperate measures don’t pay off. [The New York Times]
• So, how exactly will this bailout work? Nobody really knows yet. [CNN Money]
• I checked Monster.com for jobs in the $78,000 per hour range and found nothing. [Matrix]
• Britney Spears’ Studio City home hit the market for $7.9 million. How much will it cost to get rid of the stench of bacon, body odor, and moldy laundry? [CelebWarship]

Dine and Dash: Jamaica Plain and El Oriental De Cuba
Boston Sweet Digs Home

Forget Bailing Out; Just Move To Greater Boston

Cosmo wrote a post the other day about Tim Cahill’s statement that we have essentially been immune to the real estate crash.  And while I wouldn’t call us “unaffected” on my best day — the $120,000 our house lost when the bubble popped is what allowed us to buy it — I’m not selling anytime soon, and I’m not in trouble with Fannie or Freddie….  My heart bleeds for people who are, but, well — not it!

I often reach out to first-time buyers in this blog — the next generation of homeowner, the 20-somethings wasting good money on some of the highest rents in the country, is my Obi Wan Kenobi.  But it hasn’t occurred to me before that the crushing of other markets might be good for our own.

If you look at just about any national economic indicator right now, it looks like the end of the world.  Capitalism has failed — pick up your hammer and sickle and report for re-education.  But I can’t say it’s hurting me very much.  My mutual funds are down a couple of thousand dollars, and I still owe my soul and the souls of my first 3 children to Great Lakes Higher Education Lending, but I have a great job — and people keep trying to hire me for other jobs!  The national unemployment rate is well over 6% — how is this possible?

Am I alone in my relative prosperity?  Not really.  Coming from a market that always gets the nasty end of the stick in these things, I feel a lot of survivor’s guilt.  My college-educated friends in Pittsburgh are cruising towards their 40s doing drywall, opening drains, and rehabbing houses worth around $25,000 on average — they aren’t happy a lot of the time, and while we’re all doing better than we were a decade ago, their working lives aren’t even close to what they imagined they would be.

But here — well, I have all all of these friends with “worthless” humanities degrees, and they’re all doing pretty well.  One got hired — and trained — to handle IT for a financial firm; another manages a lab at MIT with relatively little science background.  Even the adjunct professors in our crowd are finding better and better niches.  Nobody I know is unemployed, or in danger of becoming unemployed, and nobody seems on the edge of starvation or homelessness.

Of course, I run with an educated crowd.  There are poor people here, and it’s a tough place to be if you ain’t got that dough-ray-mi.  But even (say) retail jobs pay like 50% more than they do in other markets.  Experienced cooks in the ‘Burgh were lucky to pull $8.50 per hour; dishwashers here would walk away from that money.

This is, in fact, typical of greater Boston.   Yes, it is expensive to live up here — houses cost 6-12 times (or more) what they do in Pittsburgh, or Cleveland, or Tennessee.  Rents are ridiculous.  But if you suspend your initial objections to the cost of living, you might find that your skills — or even just your buttocks in a chair — are worth way more here than you think possible.  And the market downturn means that it is cheaper than it has been in a decade to move to Massachusetts; it won’t be cheaper again, unless civilization crumbles (The Rapture, for instance, would be terrible for housing prices — but probably not in heathen Cambridge).

So my message of hope is: move where the food is.  Your chances are better in a prosperous market, a market where the standards for education and social services are higher than they are elsewhere.  People may object to this very idea — one commenter recently told one of our bloggers that eastern Mass.’s “time will come!”  — but this state is in way better shape than the rest of the nation.  Could it be because the political forces that got us into this mess are relatively powerless here?  Can’t say for sure…how are those red states doing lately?

If you take my advice, think about using the relatively inexpensive North Shore to get the best of both worlds — cheaper digs with great access to that downtown birdseed.

Here are some open houses to get you thinking:

4 Cherry Road
Beverly, MA 01915
Beds: 3/Baths:1.5
SQ.FT.:1488
$299,000
Open House: Sunday, September 28, 2008 12:00 PM – 2:00 PM

7 Bow Street
Salem, MA 01970
Beds: 2/Baths: 1
SQ.FT.:875
$210,000
Open House: Sunday, September 28, 2008 11:00 AM – 1:00 PM

7 Cypress Street
Salem, MA 01970
Beds: 3/Baths:1
SQ.FT.:1494
$249,000
Open House: Sunday, September 28, 2008 12:00 PM – 1:30 PM

6 Condos In Beverly…Under $100,000!

Boston Sweet Digs Home

How it all Began, Almost a Decade Ago

So have I got a treat for you. My friend Mitch dug up this lovely New York Times article from 1999 about how Fannie Mae was changing their underwriting restrictions “in part to increase the number of minority and low income home owners.” Now, almost a decade later, the over-extension of credit is booting these very same folks out onto the street.

A lot of people see financial apocalypse looming, but frankly, I’m not one of them.  If there’s a lesson to be taken away from this, it’s that bed credit is bad credit, and a poor investment is a poor investment. Dressing either up as anything else is a bad idea. Buying up bad mortgage-backed securities to save our banks is kind of like offering mortgages to people who can’t afford to pay them off.

Some people have bad credit, and not enough assets and income to buy a home. Some banks made bad decisions and lack liquidity to cover their debts. Though the repercussions of these things may be bad (inability to own a home makes it difficult for poorer families to get ahead, bank collapses diminish available credit) “correcting” them hardly seems like a market-based solution.

Letting prices tumble until the market is willing to buy them seems like the right way to go about this. Poorer families with good credit have a far better chance of getting a mortgage on a $380,000 three decker than a $650,000 three decker. Investment banks are more likely to find shareholders if their stock price is $.27 a share than if it’s $27. Market corrections are rough, but provided market mechanisms are allowed to operate freely and people act rationally, it all comes out stable in the end.

Open Houses in Hard Times

This week, with all the disasterous financial news, it’s hard to imagine that anyone feels optimistic enough about the state of the economy to go out and look at houses.

And yet, we all need a place to live, right? 

For those able to forget about talk of bail-outs and failing banks, who just want to find a nice place to live with a decent kitchen and a good layout, life goes on. At least if they’ve got money in an FDIC-insured bank and already secured a mortgage.

Here are two houses and one condo that look homey and comfortable enough to live in for the long haul, no matter what the state of the economy or housing market.

44 Greycliff Road
Brighton
BEDS:4/BATHS:2.5
SQ.FT: 2616
$750K 
Sunday, September 28, 2008 1:00 PM – 2:30 PM

99 Stedman Street
Brookline
BEDS:6/BATHS:2
SQ.FT:2614
$995K
Sunday, September 28, 2008 12:00 PM – 2:00 PM

40 Browne Street, #3
Brookline
BEDS:2/BATHS:1
SQ.FT: 1,072
$459K
Sunday, September 28, 2008 12:00 PM – 2:00 PM

Sweet Digs Boston Home
Brighton, Brookline Archive

Dine and Dash: Jamaica Plain and El Oriental De Cuba

Monday evening, Mr Alyk and I hoped to have a Cuban sandwich at Jamaica Plain’s El Oriental De Cuba; however, the gods didn’t cooperate. As we strolled through the door, an apologetic gentleman let us know we were a bit too late; they closed at nine o’clock.

Someday we’ll enjoy our sandwiches, but not this weekend. As we left, the breakfast menu begged us to visit Sunday morning, but they probably don’t serve from the lunch menu until lunch. Go figure…

While we won’t sate the craving for a Cuban sandwich, we should get a top-notch Cuban breakfast before we hit a few Jamaica Plain open houses.

17 Kingsboro Park, #2
Jamaica Plain, 02130
Beds: 3/Baths: 1
SQ.FT.: 1210
$409,000
Open House: Sunday, September 28, 12pm – 2:00pm

526 Centre Street, #5
Jamaica Plain, 02130
Beds: 1/Baths: 1
SQ.FT.: 456
$174,900
Open House: Sunday, September 28, 12pm – 1:30pm

44 Lockstead Avenue
Jamaica Plain, 02130
Beds: 3/Baths: 3.5
SQ.FT.: 2016
$769,000
Open House: Sunday, September 28, 12pm – 2:00pm

Hitting the Links
Boston Sweet Digs Home

“We have not been impacted by the real estate crash…”

If you managed to fight through the fundraising on WBUR this morning, you heard those very words from the mouth of our own State (Commonwealth?) Treasurer Timothy Cahill. He shared that and a lot of other fairly positive, fairly interesting bits of information with with Bob Oakes in this extended interview

Another tidbit from the interview: the Massachusetts State Employee pension fund is down a mere 8% this calendar year. Not only is that well below the losses (20-25%) suffered by the market as a whole, but it’s also better than my own 401k, which dropped 15% since January.

Despite the relatively unscathed state of the Commonwealth’s finances, and unlike many people who limited their market exposure over the past year (myself included), Cahill is 100% behind Henry Paulsen’s bailout plan. He argues that less available credit will hurt small business and education, areas where debt can be a potent economic stimulator.

Most importantly, Cahill said “We’re closer to the bottom. I don’t know if were at the bottom, but were certainly close to the bottom. Once we hit bottom, the markets will start coming back and we’ll start moving up.”

So what better time to buy? Volatile markets are no time to horse-jump between stock investments, and with a looming bailout and a Fed chairman who’s on record saying inflation is good for America, do you really want to keep liquid assets lying around? Especially if you exceeded the $100,000 FDIC guarantee, those bank accounts are better invested in brick and mortar.

Here are some cost reductions from the market-proven neighborhood of Back Bay, just to whet your home-buying appetite.

306 Comm Ave #4
Back Bay, MA 02115
2 beds, 1 bath
880 sq. ft.
Old Price: $719,000
New Price: $699,000

223 Beacon St, #1
Boston, MA 02116
2 beds, 2.5 baths
1,459 sq. ft.
Old Price: $894,000
New Price: $865,000

180 Commonwealth Ave, #A
Back Bay, MA 02116
1 bed, 1 bath
812 sq. ft.
Old Price: $619,000
New Price: $589,000