Is Chinatown Affected by Slowdown in Housing Market?
Posted By Chinatown Blogger On February 21, 2008 @ 6:34 pm In WORD ON THE STREET | 6 Comments
For over a year, we have heard about problems in the housing market from subprime mortgages, loan defaults, resetting ARMs, declining property values, bank losses, municipal bond insurance ratings, consumer spending, recession, etc… Today the [1] Boston Globe reported that data provided from the Warren Group showed that foreclosures were up 128.3% in January 2008, with 799 foreclosure deeds, compared to 350 deeds in January of last year. Auctions were up 77.8% while petitions to foreclose were up 28 percent.
So how is Chinatown weathering this downturn in the housing market? Let’s look at some residential housing data in Boston Chinatown. (We will write about commercial property another time.)
From [2] trulia.com the website lists 16 recently sold homes in the Chinatown neighborhood from Sept. 18, to Dec. 20, 2007. (There were more sold throughout the year, but we’ll limit our data collection between Sept-Dec.) All the properties sold were condos, none were single-family or multi-family homes. There were 16 condo sales, with the average selling price of $1,260,728. The most expensive unit sold? A 3br/5ba 3,246 square feet condo on 2 Avery St. went for $4,750,000. The least expensive unit was $375,000 located on 170 Tremont St. with 1br/1ba and 675 square feet. These units are nearby Downtown Boston, but are considered Chinatown on trulia.com.
The City of Boston’s Department of Neighborhood Development (DND) provides a [3] Foreclosure Trend in Boston neighborhoods. Unfortunately, the data is only up-to-date for 2006. The table below shows that Chinatown (Central) had no foreclosures in 2006. Dorchester, Roxbury and Mattapan had the highest number of foreclosures.
The 2nd table below shows that there were 16 Foreclosure Petitions in Central/Chinatown (not all foreclosure petitions actually goes through foreclosure as owners refinance or sell their homes), but the percentage was still below the citywide average.
From this cursory research, Chinatown is thriving in the current housing market environment, for good and bad reasons.
The good: 1) People are still buying in the area; 2) Chinatown has a large base of subsidized and elderly housing (estimated to be about 40%) which stablizes the residential community; 3) The lack of new construction (supply) has kept demand high in the area.
The bad: 1) Lack of new construction has also translated into lower homeownership. In Census 2000, Chinatown’s homeownership was under 5%; 2) If there are new construction, most of the units built since 2000 have been “luxury” condos that are beyond the $15,000 median income of the neighborhood.
What are your thoughts? Is Chinatown thriving or just surviving? Post your comments.
6 Comments To "Is Chinatown Affected by Slowdown in Housing Market?"
#1 Comment By Anthony Longo On February 22, 2008 @ February 22, 2008
this is all interesting stuff? do you guys drill down chinatown condo data regularly? if so i would love to catch up.
thx,
tony
#2 Comment By Chinatown Blogger On February 22, 2008 @ February 22, 2008
Anthony: I would not say reguarly but we do look at housing trends in the neighborhood. I plan on writing another piece on on Chinatown’s Housing Inventory, including new construction plus projects in the pipeline.
#3 Comment By Ryan On February 23, 2008 @ February 23, 2008
New construction is actually important in keeping a real estate market healthy. What happens if there’s a lack of construction is that housing prices do start to rise, but people start getting unhappy with the prices and move to cheaper areas. Younger people and couples will look elsewhere for housing that’s both cheaper - and newer (and usually better, too). All of those things are a big part of why Massachusetts has been hit so hard in this housing crash: for years, our prices were getting artificially high, all the while there was a lack of new development… so there was nothing to attract young people to here, when there were more jobs/cheaper/better housing elsewhere… and lots of people were moving away from Greater Boston for the cheaper housing, just commuting in. Yet, prices didn’t fall, because people weren’t selling for what should have been the housing prices, used to seeing the big ticket sales on mediocre housing. All the while fewer and fewer houses were being sold, because no one was willing to pay those prices when they new a bubble was about to pop.
And now we find ourselves where we are today - the bubble’s burst and prices are going down to where they should be. However, if we found ways to create new development - or at least total revamping of older property, with more affordable property infused in (that’s a key, to get talented young people to stay), the bubble wouldn’t have burst… and we’d have a much healthier economy today.
Affordable housing, along with health care affordability, are the two most pressing issues facing Massachusetts today. They affect so many more things than just health care and housing that we have to actually work to find solutions in those areas.
#4 Comment By willng24 On February 25, 2008 @ February 25, 2008
Ryan has a great point regarding the renovations of older homes.
Does anyone know if the city/state offers subsidies for home renovations?
Interesting enough, this article reminds me of a blog that Mark Cuban (Mavericks owner) wrote about purchasing a home as if you were taking a company public. Please read it is rather interesting:
[4] http://chrissoderquist.blogspot.com/2007/09/potw-marc-cuban-on-taking-your-house.html
#5 Comment By Beantown Bloggery On February 25, 2008 @ February 25, 2008
Any news on the Lofts Avana project? Wasn’t it supposed to be done by now? Any idea how many units have been sold and how many are still available?
#6 Comment By Chinatown Blogger On February 25, 2008 @ February 25, 2008
Beantown: The Boston Condo and Luxury Real Estate Blog here says that 50% of the units have been sold and also provides a helpful MLS listing.
[5] http://boston.condodomain.com/blog/lofts-avana-chinatown/
Article printed from THE CHINATOWN BLOG: http://bostonchinatowngateway.com
URL to article: http://bostonchinatowngateway.com/archives/241
URLs in this post:
[1] Boston Globe: http://www.boston.com/business/ticker/2008/02/mass_foreclosur_8.html
[2] trulia.com: http://trulia.com
[3] Foreclosure Trend: http://www.cityofboston.gov/dnd/PDFs/U_ForeclosureTrends06.pdf
[4] http://chrissoderquist.blogspot.com/2007/09/potw-marc-cuban-on-taking-your-house.html: http://chrissoderquist.blogspot.com/2007/09/potw-marc-cuban-on-taking-your-house.html
[5] http://boston.condodomain.com/blog/lofts-avana-chinatown/: http://boston.condodomain.com/blog/lofts-avana-chinatown/
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