Sunday, March 19, 2006

Real Estate Nausea in Boston ...

I live in the Boston area, which has one of the most expensive places in the country to live, real-estate-wise. I bought my house, a 2-family 3-story 1905 Edwardian cookie-cutter house near Davis Square, Somerville, in 1996 for half the price that a single floor of similar houses is now fetching as a condo in the same neighborhood. I've seen condos in my neighborhood range from $300k to $600k. It's unbelievable. (This doesn't make me rich: even if I wanted to borrow every cent I could out of the house I couldn't afford the mortgage on it, and unless I want to move to a completely different part of the country I'd need every cent of equity I have in this house just to move to another house.)

One thing we do have to do if we ever want to sell this house is some major renovation. These exorbitantly overpriced condos have of course all been recently upgraded, though with cheapo Home Depot crap that will just fall apart in 5 years. Clearly buyers will expect a new kitchen and new bathrooms, and the house needs some wiring and a major exterior paint job.

It's *very* hard in this area to find contractors, though. Believe me, I've tried. One part is of course that almost nobody you ever speak to who has had work done will actually recommend their contractor. Usually quite the opposite. But the problem is that the ones who *do* come recommended are unavailable. They usually don't return phone calls and even if they do, they usually cut you off with "what's your budget?" The problem is, the home renovation market only needs a few dozen very wealthy individuals (corporate executives or financeers or the like) in a region to keep them completely busy year-round, year after year, doing little additions to their suburban McMansions or redoing their kitchen for the third time. So people are not only often booked two plus years ahead, but the jobs they *are* getting have insanely huge budgets.

I got some skepticism from coworkers recently when I told them that when I get the "what's your budget" question, it is quickly followed with "I don't do any jobs less than $250,000." Two hundred and fifty thousand for RENOVATION?! That's on TOP of whatever mortgage you have, which is already twice that or more if you bought within the last five years!

Well, here's some corroboration: today's Boston Globe reports on four houses in the area that are vying to appear in a future episode of This Old House. Get this: the *cheapest* budget for renovation is $250,000. The other three houses have $300,000, $500,000, and $650,000 budgets respectively. This ... is ... insane. It can't possibly last.

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At Mon Mar 20, 12:11:00 AM EST, Anonymous Margaret said...

Did you check your house on That is sort of fun ... and I had my own mind blown doing it. As Naomi says, however, "I'll be leaving this house in a casket" so that's how I feel too. Nice to rid myself of "should I move" stress. I can live in my unrenovated home foreva.

At Mon Mar 20, 11:08:00 AM EST, Blogger IVSTINIANVS said...

Yup. In fact I looked my house up yesterday, shortly after writing that post.

They seem to think my house has a smaller square footage than both houses next to me, even though they are all identical cookie-cutter houses built at the same time and with all the same details. None have any additions. I would shock me if the attached garages that my neighbors have but which I do not have were considered extra square footage, as square footage is really only supposed to count "living space" (e.g. it doesn't count unfinished basements). It's possible that both houses have finished basements but again I'd be shocked if that is worth an extra $130k valuation. My guess is that someone at the tax assessor's office goofed (they are the only people who have a record of square footage; the deed only gives the dimensions of the land): either my house is being underassessed, or my neighbors' houses are being overassessed...


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