Why is Boston so expensive? (Worcester, Cambridge: real estate, apartment, to rent)

[W-B proud]

Just curious. I can see why New York City can command such a high price, being that it is the largest city in the U.S. and the finacial capital of the country... but why Boston? Philadelphia is much larger, but similar in alot of ways (history/higher education ect.), but is much cheaper in comparison. The same goes for Wash D.C. /Baltimore. So what makes it so much more expensive (from what I've read and heard)?

[gf2020]

Did you ever take economics in school?

Supply and demand drives real estate costs in Boston, just like it does everywhere.

[Mr. Joshua]

Boston is the largest city on what is the most historic and arguably most beautiful 50 miles of coastline in the country. It is a city that also will not allow itself to be turned into a huge metropolis.

[oakparkdude]

Boston is also full of highly paid professionals (headquarters of the mutual fund industry) who have the resources to bid up the price of real estate.

[MassVt]

Boston and Cambridge contain so many colleges and universities, many of them private and expensive, which attract students from wealthy families who drive up the cost of housing for everyone.

In addition, while it has its poorer areas, it is not filled with decaying, bombed-out neighborhoods, unlike some other East Coast cities.

[US-Traveller]

Originally Posted by W-B proud

Just curious. I can see why New York City can command such a high price, being that it is the largest city in the U.S. and the finacial capital of the country... but why Boston? Philadelphia is much larger, but similar in alot of ways (history/higher education ect.), but is much cheaper in comparison. The same goes for Wash D.C. /Baltimore. So what makes it so much more expensive (from what I've read and heard)?

1. Boston has a much better economy than Philadelphia and has undergone widespread gentrification while most of Philadelphia contains a lot of urban blight.

2. The Washington DC area is more expensive than the Boston area.

3. Boston isn't all that expensive. Boston's cost of living has actually had one of the biggest declines according to recent statistics of the large cities in America. Right now Chicago and Boston are about even and I think that is a fair price.

[MassVt]

Originally Posted by US-Traveller

1. Boston has a much better economy than Philadelphia and has undergone widespread gentrification while most of Philadelphia contains a lot of urban blight.

2. The Washington DC area is more expensive than the Boston area.

3. Boston isn't all that expensive. Boston's cost of living has actually had one of the biggest declines according to recent statistics of the large cities in America. Right now Chicago and Boston are about even and I think that is a fair price.

Boston is more expensive than Chicago, in both apartment renting and home buying. The upper ends of homebuying are roughy equal, but otherwise, Boston is more expensive.

If you're trying to rent a 1BR apt in Boston for less than $1000, good luck; if you're trying to find a 2-3 BR house for less than $350K, you might find yourself in Providence or Worcester.

[ogre]

I imagine that population density has a significant effect. Boston and its inner suburbs, and some suburbs not so close to the city, are very densely populated. I'd speculate that this has at least a couple of causes: 1) Many cities in this area had much of their growth before the existence or widespread use of the automobile, so they developed as densely packed centers of population convenient for walking and the use of public transit; 2) Historically, maritime trade was a mainstay of New England's economy, so much population packed into the prosperous port towns along the coast.

With the growth of auto-based suburbia, people moved into lightly populated areas precisely because there was lots of space. The dense concentration of population near the coast left plenty of sparsely populated areas available for suburban growth just a few miles inland. With low population density viewed as an attraction, people who moved into these formerly rural areas created ordinances to maintain open space, such as keeping some areas natural and undeveloped, and zoning for relatively large lot sizes. Thus a pattern of dense centers of population with relatively lightly populated spaces in between has been perpetuated. Then the law of supply and demand takes over. Demand for open space was high, which drove up the price of suburban properties. At the same time, the supply of available land per person is low in the densely populated coastal areas and old industrial cities, which again drives up property costs.

[xS☺B☺s]

High end colleges is one factor.

Another factor is minimal urban decay during the white flight era. Boston was the first American city to recover from the white flight era. While NYC was still a cesspool in the 90's, while LA had the riots and while PHL and CHI continued the downward spiral, Boston was already on the mend. In the mid nineties Boston's crime rate hit an all-time low since the 60's. Boston was the first urban place at the time to show that a dense urban society in the USA could be desirable. Other cities have followed suit with Miami Beach, NYC recovering shortly after BOS, then LA, now CHI and PHL are on the way.

Given that new safety and desirability, density is a factor in Boston's desirability. For those seeking an exciting dense urban environment (invariably the young and hip), Boston offers a better version of that environment than most cities in America. And of course although BOS can't compare to NYC, if NYC is too much or too $$, BOS offers a reasonable alternative. In that same vein Boston is usually considered America's most "European" city. It's about halfway in the old world and in the new.

A PP mentioned that BOS's real estate value has declined. Maybe that is or isn't true, but relative to similar cities (DC, CHI, PHL, LA), certainly that is the case. I think what happened is not so much that BOS has slipped in value, but others are coming up to equal or surpass BOS. IOW, things are evening out. A friend of mine bought a house in LA 10 years ago for 200K. The same house in BOS would have cost $500K at the time. The same house in BOS would probably cost $600K. She sold that house in LA for $900K. I still see flats in downtown CHI for less than 200. A true steal imho. Eventually other folks will discover the same.

All that, not to mention Boston's unique characteristics - the ocean, river, architecture, history and preservation. Boston is better preserved than London, which is of course sadly due to the Blitz. Otherwise a lot credit for preservation must go to smart neighborhood groups who stopped "urban renewal" before it was too late and also to the BFD. I think the BFD has done a whole heck of a better job at stopping fires than other cities.

On top of that, BOS's economy is solid and weathers storms better than many others.

Boston is a rare and unique place, particularly in the USA. It's expense is due to its high market value to people seeking the particular lifestyle it offers.

[redpanda]

Originally Posted by MassVt

If you're trying to rent a 1BR apt in Boston for less than $1000, good luck; if you're trying to find a 2-3 BR house for less than $350K, you might find yourself in Providence or Worcester.

Actually, I sold a lovely 3bedroom. 1.5 baths + study, fully-renovated (stainless/granite, etc.) adorable 1400 square-foot home for just under $325k last year, in a nice area about 5 miles from downtown.

$350k won't get you into the toniest of neighborhoods, but it will get you into a lovely home if you don't mind smaller-sized houses.