“John, is this a good time to buy a Boston downtown condo?” Let me try to answer that question
Question from Beacon Hill renter: Hello John, my parents have been pushing me to stop paying Beacon Hill apartment rent and buy a Boston condo or one in the suburbs. I’m 29 and single. I guess that I’m at the age when I should be looking at buying a home but I still like the freedom that renting gives me.
Financially, I can swing buying a home. My income is between $70k – $100k (with bonuses) and the last of my student loan will be paid off late this year. Is buying a home really the right thing for me to do?
You might not like my answer, but here it is: Only you can decide if now is the right time to buy a Boston condo. I’m sure that you know your parents have your best interests in mind. Here are my thoughts at your age buying now will build equity for the rest of your life. Owning a home will probably be your biggest asset when you approach retirement age but today that seems a long way off.
Something else you should consider is the stress that comes with buying a first downtown Boston condo. It’s a relatively complex process that requires considerable time to understand and look at a lot of options to make the best decision for your circumstances. Buying a first piece of real estate is a life-event. It might not rate all of the way up there with getting married or having children but it is probably in the top five for most people.
You could become a Boston real estate investor today and still rent an apartment that you’re not tied down to. Investing as a landlord at your age gives you plenty of flexibility while building equity at the same time. A big advantage of being a landlord is that your renters will pay your mortgage and other expenses. With that said, this is not the ideal time to try to rent out a Boston condo.
I tried in my answer to give you pros and cons in buying a Boston condo in this market. Let me conclude and simplify my answer with this, today is a good time to buy a Boston condo, I would hold off on the burbs at this time, the market is too hot.
Always remember this, the Boston real estate market consistently repeats the same cycle. It’s like other markets where you want to buy low and sell high. The cycle has high, middle, and low points. Beginning in 2012, prices have been screaming up. In 2021, the market seems to be coasting along in the middle of the cycle. But once the pandemic passes the prices are again going to be going up. To time the market is very tough I would look now as I feel interest rates are the lowest you’ll see in your lifetime. You could wait for the next low point but in the real estate cycle that seldom makes sense because from my 20 plus years in the Boston real estate market it’s very rare that prices go down so significantly, that’s worth trying to time the market. At the best, they just go stagnant. But trust me a year from now interest rates will be higher.
This is a very good time to buy a Boston condo for sale. The real question you should be asking is if you want to build equity or NOT build equity?