2018 Boston Building Boom Prediction: From Records to Rent Plateaus
Each January represents a fresh start, and each New Year is always full of possibility. It’s a time to reassess your strategies and to make new plans. Since this is true for business as well as your personal life, what should you be looking forward to in 2018 when it comes to Boston building news? We’ve got our eyes on four big trends for 2018.
1. Record-Setting Home Prices
Boston is no stranger to luxury condos and high-rises, and the asking prices for the swankiest penthouses keeps going up. The current record for most expensive home sale in New England was a $35 million condo in Downtown Crossing’s Millennium Tower, but word on the street is that sales of the top spots at One Dalton in Back Bay will outpace that record. The asking price for the ritziest units in this yet-to-be-finished building? $40 million.
2. Steady Rents
In contrast to the ballooning prices of homes for the rich and mega-rich, rents for regular folks have been holding steady. In 2017, Boston dropped from the third-most expensive place to rent an apartment in the U.S. down to the fifth spot. While it’s still pricey to live here, experts think we may be past the peak and heading to a more stable rental market for the coming year. That’s due partly to the building boom, which has helped alleviate the housing shortage and concurrent price competition.
3. A Housing Market Cool-Down
Lots of home builders lobbied against it, but the Trump administration’s new tax bill is now law, and the reduction of the state and local tax deduction for people with expensive properties could splash some cold water onto Boston’s housing market. Now that there’s a $10,000 cap on real estate tax deductions, there’s less tax incentive to buy. Home values are expected to drop by 3 to 4 percent in the Boston area, and the steadier rents could encourage people to stay the course instead of buying a first home.
4. All Eyes on Affordability
Plateauing rents are one thing, but Boston is still a pretty expensive place to live. Local politicians have heard the people and are on the lookout for ways to guarantee affordable housing for all. One such development is The Beverly, a new high-rise near North Station that promises affordable housing to anyone earning 30 to 165 percent of Boston’s median income. If this luxurious, mixed-income housing is a success, many more such buildings could be on the way.
2018 promises to bring new opportunities and challenges to Boston builders, and the most successful will be attuned to the latest trends and ready to give buyers and renters exactly what they’re looking for. Here’s to a happy and successful New Year in Boston!