Thoughts on Brookline residential market (Boston, Hancock: rental market, insurance, condo)

[nishokie]

I went back a couple of thread but didn't find anything on Brookline residential market.

My wife and I are planning to buy a townhouse in the Brookline area. ...around coolidge corner. We really like the area but house prices ($650K for 3Bed/2Bath) are going thru the roof there even in this residential slump.

I would like to get your opinion whether this boom in Brookline will continue? If we buy a townhouse/condo for about $650K, will it hold its value?

Lastly, is there a street or a certain area that you'd recommend in Brookline....we like coolidge corner but I figure it must get pretty crowded and loud in the evenings...so I am looking for a nice, peaceful street close to all the action.
Thanks in advance.

[smarty]

I don't envy your situation... with good schools, close proximity to Boston and hospitals, low crime, .... Brookline has been holding its value very well. I wish I have a crystal ball to look at the future.

~For $650K + taxes + condo fee, you're talking ~$4.5K/mo. A recent article suggest that a reasonable selling price be 15x the yearly rental price. For example, if selling price is $650K, similar place should be renting $3600. However, if the selling price is 20X of rental (ie you can rent similar place for $2700), it indicates the price is too high. At $2700 rent, the place is only worth $490K. According to the article, rent tracks well with income...price of homes for some reason did not in the past 10 years.. Hence, they suggest to rent in those area where selling price is close to 20X the rental price... But, who knows if the 15X assumption is right or not...

My thoughts are if you can rent similar place for $2700, you can save $2K/mo or $24K/yr (no tax and no condo fee) and invest in something else. That return may be a better investment as you can live in the similar place and get the same benefit for less $$$.
http://www.cepr.net/documents/public...ty_2008_05.pdf

As to other areas there are good.... Washington Sq and Chestnut hill... will have less traffic and students.

[New Englander]

I recommend that you check other areas of Brookline including Washington Square. I have seen more families/schools/churches in the Washington Square vicinity. Don't get me wrong, Coolidge Corner is great but its a bit more noisier, yuppier.


In regards to the housing market question, its tougher to predict where prices are going to go. As smarty mentioned, the fundamentals of the hosuing prices do not support high asking prices, yet both sellers have been asking high prices and buyers have agreed to make that purchase. I am bearish in the housing market. I am inclined to believe that prices are headed downward everywhere including great towns like Brookline. It just might be matter of waiting a bit longer. Of course if you have a family or cannot wait to buy a place (for other reasons), then you should go ahead and buy, if you will be around for 5+ years.

[Xenos]

There is plenty of rental housing in Brookline if you are willing to wait out the housing cycles. I bought a condo in the Village for maybe 9 X annual rent at the end of 1997, which turned out to be pretty fortuitous. However, while the price for the unit doubled over the next few years, the bottom dropped out of the rental market. When we moved out in 2003 we could not rent it for enough to cover mortgage, insurance, taxes, and a reasonable return on equity. So we sold it. When we moved back into town we just rented for a couple years. Much lower stress involved. Got a perfectly nice spot at Hancock Village, feeding into the Baker School. We waited for the Brookline market to correct, then got fed up waiting and made other arrangements. In conclusion: check out the rental markets for the areas you like and think about renting while settle in and decide where to settle down. Washington Square is very nice, you may also want to check out the Village (more small-family oriented) and the St. Mary's area for something more urban although heavy on the college students.

[nishokie]

Thanks everyone for your opinion. Unfortunately, I can't wait to buy. I got a corporate move package that expires in a few months.

[Xenos]

I would like to get your opinion whether this boom in Brookline will continue? If we buy a townhouse/condo for about $650K, will it hold its value?

The answer to that is a definite "maybe". The area is extremely popular among medical professionals, whose incomes are high and about as recession-proof as you are going to get. The coolidge corner area has been getting increasingly popular over the last ten years, and I don't know of anything that is likely to reverse that trend.

Indeed, as the market slumps regionally, a 'retreat to quality' may well result in certain areas becoming more highly valued. It is a bit of a gamble, but if it pencils out for you, then there is little reason to give up the relo benefit.

If you like, I can refer you to a top-notch agent (professional and very ethical) in Chestnut Hill.

[nishokie]

Xenos - No thanks. I am already working with an agent.