Does news of major crimes cause some people to rule out living in certain neighborhoods?
That’s the theory of a Herald reporter and a media-happy Northeastern professor:
Home prices are rising in Boston’s fancy neighborhoods but falling in less-wealthy ones – and experts fear the Hub’s recent murder wave might make the disparity worse.
“I must tell you I’m worried,” said Barry Bluestone, dean of Northeastern University’s School of Social Science, Urban Affairs and Public Policy. “I do fear the violence has reached a point (where) some are going to say, “This is where I want to live?”
First-quarter figures from MLS Property Information Network show big price declines for Dorchester, Mattapan and Roxbury – neighborhoods hard hit by Boston’s 16 murders of the year so far.
I don’t know anything about the real estate market in Mattapan and Roxbury; most of my buyers are looking to buy in downtown Boston.
Regarding Dorchester, it may very well be that some buyers are having second thoughts.
There are at least three other possible reasons for the drops in prices and sales volume.
* Dorchester saw an incredible increase in the number of condos built over the last several years. With the general slowdown in the real estate market, this has caused an inventory glut. This led to a drop in list and sales prices.
* Because prices are lower in Dorchester than in the downtown Boston area, first-time homebuyers bought in Dorchester. Last year and during the beginning of this year, first-time homebuyers dropped out of the market, first, because they worried that prices were too high and decided to wait until they came down a bit, and, second, because prices got so high that they just couldn’t afford to buy. With these buyers out of the market, inventory increased, etc., etc., etc.
* The subprime mortgage loan crisis hit Roxbury, Mattapan and Dorchester harder than other Boston neighborhoods. This is pretty obvious, right? These loans were written for borrowers with poor credit or those who wanted low-doc/no-doc loans or those who wanted to borrow 100%. Many of the borrowers were in these three neighborhoods. Because of tightening lending regulations, borrowers could no longer get loans, leading to a drop in sales and a subsequent drop in prices.
Housing’s fear factor: Crime may lower prices in some Hub areas – By Jerry Kronenberg and Jay Fitzgerald, The Boston Herald