Is Chinatown Affected by Slowdown in Housing Market?

February 21, 2008 by Chinatown Blogger.

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 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 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 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.

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