Will New Developments Offer a Light at the End of the Tunnel for Millennial Homebuyers?
By Danielle D’Ambrosio, Esq.
Stealing from Peter to pay Paul? Well, you’re in good company. Millennials are on the rise and so are home prices in The Hub. What distinguishes millennials, now the biggest generation in US history, from their baby boomer parents? The attainability of the American Dream. Especially the dream of homeownership. According to the Boston Globe, 93% of millennials want to own their own home and compared to other major cities, Boston boasts the highest number of millenials (people aged 20 to 34). Young professionals flock to Boston for the combination of greater employment opportunities, lively social and cultural scene, and the convenience of public transportation. Many fall into a perpetual hamster wheel of renting that is difficult to break free from. The median rent price in the North End is $2,600, leaving many without the opportunity to save for a downpayment. Student loan debt has increased from $241 Billion to $1.1 Trillion from 2003-2014. Yes, a whopping 365 percent. Graduates are finding that it significantly cuts into their buying power. “The cost of living is exorbitantly high in the city and student debt is changing homeownership in Boston. Often, the high monthly payments towards educational debt is the millenial’s largest barrier to entry into home ownership. Many very educated millennial who move to Boston to earn a better living or have access to better career opportunities find that the combination of high rents and high student loan payments does not allow them to save for a downpayment on a home. Even if it is only three or five percent, we are still talking tens of thousands of dollars which can take years to accumulate without help from a family member when living paycheck to paycheck,” says Rachel Lake, also a millennial and Sales Manager for Ditech Financial, a residential mortgage lender in nearby Faneuil Hall.
Spend a half an hour in the North End— Boston’s first residential community since its settlement in the 1630s— and you’ll understand why many want to secure permanent roots here. Buyers want to live somewhere with a sense of community. There is no other neighborhood in the city that has held on to its sense of community than the North End. Italian-Americans still compromise roughly 41% of the population here.
The North End is a place where you make new friends walking down the streets and in the coffee shops. Some of your new friends will be residents who are well into their eighties, having lived their entire lives in the tiny neighborhood.
Sit with friends and enjoy an espresso martini at Hanover Street’s mainstay Bricco, or visit Bricco Salumeria & Pasta Shop or Bricco Panetteria for freshly assembled prosciutto sandwiches or a piping hot loaf of prosciutto and parmesan Italian bread, as I do often with my parents. Or at night, living on Hanover Street, enjoy being lulled to sleep by the sounds of the accordion and violinist serenading the patrons at restaurants. Once you’re in, you never want to leave.
This is the same neighborhood where three Sicilian friends started a small macaroni and spaghetti manufacturing business in 1912 on Prince Street and where Sacco and Vanzetti fought for their lives during their trial on Hanover Street, in the very same building where the Scene Magazine offices now live. Where almost every morning at Caffe Paradiso you run into your “uncle” Giancarlo who immigrated from Italy alongside your family over fifty years ago. The parks, which are many, are reminiscent of Italy. It is easy to lose your place in a moment, wandering the streets, and feel confused that you are in Boston, not Italy!
Warren Buffet once said that market value is simply what someone is willing to pay. Inventory is scarce and prices are climbing. The North End market is like many others in the city, in which we are seeing bidding wars and sale prices much higher than asking price. Low inventory is working in sellers’ favor. The average number of condos for sale declined by 23.8 percent statewide, according to the Massachusetts Association of Realtors. The average price for a condominium in the North End is $975,000, with the median value reaching $653,000. Affordability has become an increasing problem in well-established neighborhoods like the North End. So what is a lover of the North End to do if they want to get out of the perpetual hamster wheel of renting and invest in a condominium of their own?
Just when it seems that homeownership in the area is a lofty goal, or one that you must sacrifice all the extras for, the North Station area is suddenly a buzz with promising new development. “7,200 residential units are currently under construction citywide,” says Boston Redevelopment Authority spokesperson Nicholas Martin,“ and we are seeing many of those hitting close to the North End.” Just beyond the open space of the Rose Kennedy Greenway, where green grass and stunning views of the city have replaced a once-gloomy overpass and historic pushcarts, we find an extension of the neighborhood brewing. North Station’s Bulfinch Triangle delivering lofts at Forecaster 121, the former home of Boston’s Forecaster raincoat factory. The aptly-named condominium building will offer several middle-market units with prices starting in the $400,000 range. The building boasts a mix of hip and historic with the modern luxuries of 24-hour concierge and 24-hour valet parking services. Perhaps this is the light at the end of the tunnel. Hope for aspiring homeowners who yearn to own an inner-city home while still having enough left over to afford a grocery trip to the nearby neighborhood gem, the new Boston Public Market.
The current Boston real estate market is teaching millennials and long-time city dwellers alike that there may be truth to the old adage that we often must sacrifice to have it all. We can only cling to the hope that new development in the area will relieve some of the pressure that low inventory has put on the market and that homebuyers will not have to venture far from the North End to realize their American dream.