Boston Real Estate for Sale

The Boston real estate market and the Boston economy

The Boston real estate market and the Boston economy

Boston Condos for Sale and Apartments for Rent

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The Boston real estate market and the Boston economy

Boston Careening Towards “Urban Doom Loop”
Boston (Illustrated Getty)

Boston’s unique tax structure has the city hurtling towards potential economic disaster.

The decline in commercial real estate could have catastrophic consequences for the city, according to Boston Magazine. Boston could enter an “urban doom loop” as a result of reaping more than 30 percent of its tax revenue from commercial property, which stands well above other major cities across the country, according to a report from the Boston Policy Institute and the Center for State Policy Analysis at Tufts.

A so-called doom loop could lead to a cut in services, leading people to abandon the city. Then, it becomes less attractive to investors as the negative cycle rages on. Foot traffic in the Boston Improvement District, for instance, is stuck at levels halved from the pre-pandemic numbers.

“The bleakest scenario is something like a return to the urban experience of the 1970s, a desiccated city where a lot of the energy has left and moved elsewhere,” said Evan Horowitz, author of the CSPA report.

The bottom appears to be falling out of Boston’s office market. Property sale prices in Boston’s central business district fell by more than 30 percent year-over-year in the fourth quarter, according to MSCI, the steepest drop among the major cities the investment data provider tracked.

The values of office buildings in the Financial District have taken big haircuts, including one on Broad Street that was sold for $3.9 million, 72 percent below what it had traded for five years earlier.

Boston Careening Towards “Urban Doom Loop”
Boston’s Mayor Michelle Wu (Boston.gov)

 

The vacancy rate of Boston’s offices is hovering around 20 percent and last year, the city set a record for the largest one-year increase in new office space availability, according to JLL.

The decline in office values has roots in the post-pandemic shift to remote work, but high interest rates and expensive building requirements in Boston don’t help matters, as it becomes more costly to build in Beantown. 

Mayor Michelle Wu’s proposal isn’t helping either. She’s proposed a tax hike on commercial holdings, which would likely get passed on to the tenants trying to stick it out in Boston. The proposal has exacerbated tensions between the administration and developers.

 
Peace be with you

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The Boston real estate market and the Boston economy

Boston Condos for Sale and Apartments for Rent

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The Boston real estate market and the Boston economy

One of the biggest questions we all seem to be asking these days is: When are we going to start to see an economic recovery? As Boston, MA. begins to slowly reopen, moving forward in strategic phases, business activity will help bring our nation back to life. Many economists indicate a recovery should begin to happen in the second half of this year. Here’s a look at what some of the experts have to say.

Jerome Powell, Federal Reserve Chairman

“I think there’s a good chance that there’ll be positive growth in the third quarter. And I think it’s a reasonable expectation that there’ll be growth in the second half of the year…

So, in the long run, I would say the U.S. economy will recover. We’ll get back to the place we were in February; we’ll get to an even better place than that. I’m highly confident of that. And it won’t take that long to get there.”

Nonpartisan Analysis for the U.S Congress

“The economy is expected to begin recovering during the second half of 2020 as concerns about the pandemic diminish and as state and local governments ease stay-at-home orders, bans on public gatherings, and other measures. The labor market is projected to materially improve after the third quarter; hiring will rebound and job losses will drop significantly as the degree of social distancing diminishes.”

Neel Kashkari, President, Minneapolis Federal Reserve Bank

“I think we need to prepare for a more gradual recovery while we hope for that quicker rebound.”

We’re certainly not out of the woods yet, but clearly many experts anticipate we’ll see a recovery starting this year. It may be a bumpy ride for the next few months, but most agree that a turnaround will begin sooner rather than later.

During the planned shutdown, as the economic slowdown pressed pause on the nation, many potential Boston real estate buyers and sellers put their real estate plans on hold. That time coincided with the traditionally busy spring Boston real estate season. As we look ahead at this economic recovery and we begin to emerge back into our communities over the coming weeks and months, perhaps it’s time to think about putting your Boston condo purchasing plans back into play.

Boston Real Estate and the Bottom Line

The experts note a turnaround is on the horizon, starting as early as later this year. If you paused your 2020 real estate plans, let’s connect today to determine how you can re-engage in the process as the country reopens and the economy begins a much-anticipated rebound.

The Boston real estate market and the Boston economy

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Here’s something I’ve been thinking about regarding the stimulus package: Supposedly we got ourselves into this economic mess by spending ourselves into oblivion. Economists, financial advisors are telling us we should’ve behaved more intelligently with our money.

But the federal stimulus package will shower us with millions if not billions in tax cuts so we can, do what…. you know, stimulate the economy.

Can you see why I’m a little confused here?

From the Washington Post

There has been less emphasis on what we, as individuals, should do. President Obama ducked the question at his news conference last week. But logic suggest that we should be gluing those credit cards back together. The goverment is actually going to pay us to buy a new house or car. Borrow and spend, borrow and spend is what got us into this mess. Apparently borrow and spend will get us out of it.

Support President Obama and borrow and spend your money on a new Boston condo.

Any thoughts?

 

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