DATE: March 9, 2012
Allan Hackney and his wife Jane moved to Boston in 2008 to take a job downtown, after working in Manhattan and living in the Connecticut suburbs for many years. Allan Hackney was almost positive his wife would like city living, so they chose to rent a two-bedroom apartment near the corner of Arlington and Beacon streets, near the Boston Public Garden and steps to Newbury Street and Beacon Hill.
After three years of renting, the Hackneys decided to purchase in town. “We waited to get past the period where the market had bottomed out, and always noticed in certain neighborhoods, well-maintained properties were always desirable and turned quickly,” he said. “We decided to buy with the likelihood that the bottom wasn’t going to fall any further.” Today, compared to three or four years ago, many baby boomers and empty nesters coming into Boston from suburbia are looking to purchase right away, instead of renting first.
Whether its buying a second property, or making Boston your full-time home, the plan is to go straight to a purchase instead of leasing an apartment to “try out” city living. Real estate professionals say there are several factors driving this trend toward buying instead of renting first, including a low interest rate environment, a renewed confidence in the downtown housing market and a rise in rents.
According to a recent report from Marcus and Millichap, the outlook for the 2012 Boston rental market is that vacancy rates will reach a 10-year low of 3.5 percent and effective rents will increase 5.8 percent. Mary Kelleher, a broker with Gibson Sotheby’s International Realty, said she is seeing many buyers making the shift from the suburbs to the city, and they are looking for clean, open, loft-like spaces. “Up and coming areas such as the Leather District and the Seaport area are getting more of a nod lately,” she said.
“Buyers are connecting the dots, realizing you can walk from the Seaport or South Boston to the work in the Financial District and to restaurants.” Kelleher added: “Money is cheap, and many of these buyers are paying cash, rolling over equity from the sale of their home in the ‘burbs or obtaining a very small mortgage.”
Amy Goldberg William, a Back Bay broker with William Raveis Real Estate, who worked with the Hackneys on their move to Boston said: “Many of these buyers coming in from the suburbs perceive Boston real estate as a stable investment, more so than the stock market. This is especially true for buyers that are retired or nearing retirement age.”
“Many of these buyers coming in from the suburbs don’t need to move into the city, but they want the lifestyle and the amenities that urban living has to offer,” she said.
The Hackneys chose to purchase a floor-through two-bedroom home at 166 Beacon St. with central air, an elevator and parking. “With the velocity of transactions we found it a safe place to park the money,” Hackney said.