Boston MetroWest Low Inventory, High Prices (areas)

[mwbms28]

Originally Posted by robr2

Actually that's $500K in business investment. Buying a house doesn't qualify.

Two of the buyers specified that they were purchasing the house as an "investment property." I think the "business" end will involve tearing our old house down, building a new one, and selling it.

Then the investor can reinvest that money is a more expensive property and avoid (delay) paying taxes on the profits from the sale of the first. It's quite the loophole.

I am just speculating, of course.

[rethcir]

Originally Posted by mwbms28

I honestly do not know how a young couple without family money affords a house in Metrowest anywhere. Even if you save the 20% down payment, you're going to get blown out of the water by cash buyers every time. So what... If you want to buy a $400,000 house in a desirable location, it seems like you're going to to need to save at least $150-200K while paying rent, student loans, etc? Who can save $200K? It's hard to do.

We have acquaintances who are looking in the $1-1.2 million range, and every time a desirable house comes up, they put in an offer over asking and get busted by cash buyers going way over asking.

Family money, or putting down less and taking points on the mortgage are the only way. Or playing the starter house game.

[robr2]

Originally Posted by mwbms28

Two of the buyers specified that they were purchasing the house as an "investment property." I think the "business" end will involve tearing our old house down, building a new one, and selling it.

Then the investor can reinvest that money is a more expensive property and avoid (delay) paying taxes on the profits from the sale of the first. It's quite the loophole.

I am just speculating, of course.

Buying a house as an investment property does not qualify for an EB-5 visa unless that house cost $1 million and creates 10 permanent jobs.

https://www.uscis.gov/eb-5

[MikePRU]

Originally Posted by mwbms28

We just sold our house in Metrowest for $80K over asking, all contingencies waived, all cash, within a day of listing.

All of the serious bidders were Asian (Chinese, I think). Did you know that if you make an investment of more than $500K in the US, you can fast-forward your green card application? I learned that through our sale process. Plus, US real estate can serve as a tax shelter for Chinese buyers under certain circumstances. As a result, some of these buyers are paying for more than just the price of the house.

Our real estate agent said this trend is only accelerating. I think it contributes to the trend you've brought up.

I honestly do not know how a young couple without family money affords a house in Metrowest anywhere. Even if you save the 20% down payment, you're going to get blown out of the water by cash buyers every time. So what... If you want to buy a $400,000 house in a desirable location, it seems like you're going to to need to save at least $150-200K while paying rent, student loans, etc? Who can save $200K? It's hard to do.

We have acquaintances who are looking in the $1-1.2 million range, and every time a desirable house comes up, they put in an offer over asking and get busted by cash buyers going way over asking.

Chinese investment is definitely a big factor in many Boston area locations. I've seen plenty of it in places like downtown Boston, Brookline, Wellesley, and many other locations. It's such a significant part of the market that my company recently made a deal with the largest property search website in China, Juwai.com. If you're just advertising on the usual internet sites like Zillow, Trulia, Realtor.com, etc. those aren't accessible on the other side of the Chinese firewall.

[Whatsnext75]

'For instance, a home in Northborough purchased in 2014, selling in 2017 for $85K profit when they made no major improvements'

That's nothing. My friend bought a condo in dorchester in a not great area in 2014 for 300k something. He just sold it for 500k something. Still not a great area. No updates. Welcome to the boston area.

[massnative71]

Originally Posted by Whatsnext75

My friend bought a condo in dorchester in a not great area in 2014 for 300k something. He just sold it for 500k something. Still not a great area. No updates.

That is INSANE.

[MikePRU]

Originally Posted by Whatsnext75

'For instance, a home in Northborough purchased in 2014, selling in 2017 for $85K profit when they made no major improvements'

That's nothing. My friend bought a condo in dorchester in a not great area in 2014 for 300k something. He just sold it for 500k something. Still not a great area. No updates. Welcome to the boston area.

Wow! That's some serious appreciation.

I have a listing in Needham that my clients bought less than 2 years ago. We have it under contract for about $150K more than they paid for it.

[Brave Stranger]

My 900+sf little ranch in Arlington purchased in 2011 for 330k is now worth about 550k. It's not so much the house.....it's the lot that's worth the cash. If I put this house up it would be torn down by the builders in a nanosecond & replaced with a 3500sf 1.4 million dollar McMansion.

[Whatsnext75]

Yeah i just found the listing...i wont share it because that seems creepy. But he bought it in 2014 for 389k and just sold it for 545k. 1100 sq ft...very nice place but again not a fabulous dorchester location..neponset area.

What is happening?? Lol

[massnative71]

Originally Posted by Whatsnext75

Yeah i just found the listing...i wont share it because that seems creepy. But he bought it in 2014 for 389k and just sold it for 545k. 1100 sq ft...very nice place but again not a fabulous dorchester location..neponset area.

What is happening?? Lol

What is happening is apparently foreigners see something in these places the rest of us don't LOL, hence driving up the prices to unforeseen levels.


But Neponset isn't a bad area at all. Would I pay 545K for an 1100 sq. ft. condo there, absolutely not.