Why is it so hard to price a Beacon Hill condo?
Boston Condos for Sale and Apartments for Rent
Why is it so hard to price a Beacon Hill condo?
What’s the value of a Boston Beacon Hill condo? How about an aging apartment complex on Charles Street?
In the dark art of valuations, industry pros rely on comparable sales to put a price on Boston condos for sale. But higher interest rates have led to fewer deals, obscuring an already murky view for brokers, lenders and developers.
Boston condo sales are down from last year, according to Case Shiller. October Massachusetts sales were at 13 year low. Boston sales this summer fell to their lowest level since the Federal Reserve started raising interest rates in March 2022,
While any appraisal requires some magical thinking — predicting things like income, occupancy and economic cycles — the decline in transactions has made the guessing game particularly difficult.
Lenders especially are focusing on metrics outside of valuations.
Nobody has a good sense of value, Everyone is operating on what has happened in the past.”
With the tight lending environment — is another a key reason for the lack of sales
To make matters worse, some operators who bought lower-quality apartment complexes with floating-rate debt are struggling, the asset class as a whole remains stable.
