Warren Residential Group Blog – Boston Real Estate Blog

Boston’s newest Waterfront development is the 33 story gleaming tower called Russia Wharf.  Slated to be completed at the end of 2010, Russia Wharf has gone through some major changes over the past couple years of planning and development.  Originally conceived during the height of the market, the place was to have 215 luxury condo units with stunning views.  This would have been bigger and provided better views than the neighboring InterContinental Hotel and Residences.  Well, given the past 18 months of economic downturn, Boston Properties reduced the number of condo units from 215 to 65 with the rest of the building being comprised of 750,000 sq. ft. of office space.

Since the reduction in units, financing for developments has become even tougher.  Guidelines have got tighter and funds are less likely to provide the financing needed for condo projects.  This has caused the most recent change at Russia Wharf; the conversion of the remaining residential units from condo to rental.  The hopes down the road are that when the market gets hot again, they will be able to convert them back to condos and sell them off individually.

My Thoughts:  To be honest, I think this is good news.  The Boston Waterfront is one of our most requested locations for sales and rentals.  The problem is, there is a lack of inventory in regards to luxury rentals on the Waterfront.  This will provide for 65 new high end units with spectacular views.  We are excited!

We handle Boston and Cambridge area apartment rentals for people who make millions of dollars a year to students with no income what-so-ever and everyone in between.  With that said, many of our renters need a co-signer of some sort.  Here are some reasons why you might need a co-signer:

• Lack of Credit
• Bad Credit
• Lack of Income
• Bad landlord reference

The problem most people have is actually finding a co-signer.  How many of your friends would put their credit and money on the line for you?

Well, this is where WeCosign.com comes in.  They saw an opportunity and here is how it works:

1. An applicant who doesn’t meet the Landlords FICO score criteria is directed to call WeCosign so they can determine their eligibility for their service.
2. WeCosign reviews the applicant, and if approved they will cosign their lease agreement and act as their guarantor.
3. The landlord collects the rent from the tenant as usual, and the tenant pays WeCosign an additional monthly fee for their service.
4. In the event that a tenant stops paying their rent, WeCosign assumes financial responsibility under the terms of the lease agreement.

It’s that simple.  It’s really a genius idea that fulfills a big need.

So now that you have your co-signer, you need to find an apartment.  Clink the links below to do that!

Search for Your Boston, Cambridge, or Brookline Apartment Here

Browse all Cambridge Apartments Here!

Browse all Boston Apartments Here!

Browse all Brookline Apartments Here!

Clients always ask me about mortgages.  They ask:  What is the current rate?  How much of a loan can I get?  Etc., Etc.  Well, the answer is that there really is no one answer for those questions.  There are so many variables that come in to account that it is impossible to give solid answer.  So, I asked our good friend Christina Longo over at Prospect Mortgage if she at least has some basic criteria for my Boston condo buyers to use as a guide.  Here is what she gave me:

For First time Home Buyers –

Credit score above 650

Need full documentation files (W-2, pay-stubs, bank statements, tax returns)

3.5% of own funds needs to be own funds into the transaction – unless putting 20% or more down

Verbal verification of rent for 12 months – name and # of landlord

FHA allow as little as 3.5% down

MA housing as little as 5% down (approval predicated on low income qualifications)

Condo guidelines –

All New Construction buildings (where the developer hasn’t yet turned over to homeowners association) you need 51% pre-sale requirement

No litigation allowed against the development

If commercial space in building – must be less than 20% of building (or can go for an exception)

All common areas and unit must be 100% complete to close on the unit

PMI – less than 20% down you need Private Mortgage Insurance (PMI)

You cannot go over a 41% debt to income ratio

If buying a condo you MUST have 70% owner occupancy ratio

NO LITIGATION – NO EXCEPTIONS

No more than 10% of the units in the project can be owned by more than 1 person

I know that is a lot to comprehend but at least if you use it as a starting point it should help you narrow down what might be possible and what definitely isn’t.  If you have more questions about Boston mortgages, please call Christina Longo at 978-886-9359 or email her at christina.longo@prospectmtg.com.

A representative from a company called rentBits reached out to me over the holiday weekend to let me know about her company and give me some rental data that she thought our readers/clients might like to have:

According to rentBits, a rental search engine for apartments and rental homes, the average rental rates for Boston have seen a slight increase October over September. Collectively, across all bedrooms, the average rental rates has risen from $2483 in September to $2526 in October.

“As demand for rentals begins to increase, and supply remains constant, average rental rates will continue to climb.” says Dan Daugherty, CEO of rentBits. “In Boston, our data shows an increase in rental rates for both Apartments and Single Family Homes.”

In most other cities across the US, rental rates for apartments are seeing a slight decrease for the year. Much of this is due to a decrease in demand. Many renters for apartments are either moving into a single family home rental, moving back in with Family or sharing rooms with friends. This transitional period has put downward pressure on most apartment rental rates.

I’m not sure where they get all of their data but you can check out their site at rentBits.com.  Personally, I haven’t seen rental rates rising.  In good areas they are down about 5% but in fringe areas we have seen units rent for 10-15% below what we rented the same apartment for last year!

Christina Longo over at Prospect mortgage just sent me over the following data points in regards to the economy.  Looks like things are looking up!

-Existing home sales rose 10.1% in October to a seasonally adjusted annual rate of 6.1 million units from 5.54 million units in September. The increase was largely due to the tax incentive for first-time homebuyers. The inventory of unsold homes on the market fell 3.7% to 3.57 million, a 7-month supply at the current sales pace, and the lowest level since February 2007.

-The Commerce Department announced that gross domestic product — the total output of goods and services produced in the U.S. — increased at an annual rate of 2.8% in the third quarter of 2009, rather than the 3.5% increase initially reported last month.

-The Standard & Poor’s / Case-Shiller 20-city housing price index rose 0.27% in September. It was the fourth consecutive monthly gain and follows a 1.13% increase in August.

-The Conference Board reported that its consumer confidence index rose to 49.5 in November from a revised 48.7 in October. Economists had expected a reading of 47.3. The index was benchmarked at 100 in 1985, a year chosen because it was neither a peak nor a trough in consumer confidence.

-The Commerce Department reported new home sales rose 6.2% in October to a seasonally adjusted annual rate of 430,000 from an upwardly revised rate of 405,000 in September. It was the highest level since September 2008. Economists had expected a pace of 410,000.

-Orders for durable goods — items expected to last three or more years — fell 0.6% in October after a revised 2% gain in September. The drop was largely due to an 18.4% decrease in orders for defense-related goods.

-The Commerce Department reported that consumer spending rose 0.7% in October, higher than economists had anticipated. Personal income increased 0.2%.

-Initial claims for unemployment benefits fell by 35,000 to 466,000 in the week ending November 21. Continuing claims for the week ending November 14 fell by 190,000 to 5.42 million, the lowest level since the week ending February 28.

-Upcoming on the economic calendar are reports on construction spending and pending home sales on December 1, and factory orders on December 4.

Even with the current economic environment, Menino and the BRA are looking forward on development, specifically along the corridor between the Back Bay and Theatre District along Stuart Street.  They have recently come out with new development guidelines in this area which would allow developers to go well above the height restrictions to over 400+ feet.  However, there will be some trade-offs.

For developers to go above and beyond the 400 foot mark they must provide the following:

• Incorporate advanced sustainability methods” at Leed Gold level or net zero energy consumption.
• If there is already a “Historically Significant” building on the site, the developer must preserve the facade

After the developer meets these guidelines, they then must choose one of the following:

• Pay for affordable units to be built.  Either make 15% of the project affordable or build affordable housing elsewhere
• Contributing to a “street scape/pedestrian and bicycle fund.”  This is basically a fund to improve pedestrian street conditions
• Provide “publicly accessible art” of their own, or donate to the Fund for Boston Neighborhoods.

While these options might not sound that bad, they must account for .5% of the total project which can really add up on a $200-300m project.

Some people are moaning and groaning about these new guidelines saying that basically “anyone” can have a “400 foot tower”.  I think it is good for the city.  New buildings bring jobs and excitement to a city.  As they say, f you aren’t growing, you’re dying.

Check out some of Boston’s newest luxury condo highrises right here:

• The Clarendon Back Bay
• The W Boston Residences
• 45 Province
• One Charles
• Atelier 505
• The Ritz Carlton
• Midtown Boston Luxury Apartments

Christina Longo at Prospect mortgage sent me the following email this morning:

Senators have agreed to extend the $8,000 first-time homebuyer tax credit originally set to expire on November 30. Once the Senate officially votes on the bill it will move to the House of Representatives, which strongly supports the extension. The Obama administration has also signaled its strong support for an extension of the tax credit.

Aside from the first-time homebuyer credit, the new plan would offer a $6,500 credit for repeat or move-up homebuyers who have lived in their primary residence for five years or more. The tax credits would be available to buyers who sign purchase agreements on a new or existing primary residence between December 1, 2009 and April 30, 2010. Buyers would have until June 30 to close on their new homes.

There is an $800,000 price limit on all homes eligible for the credit. The income limits for all buyers would rise to $125,000 per year for individuals and $225,000 for married couples. Under the current program, the limits are $75,000 and $150,000 respectively. The first-time homebuyer credit is also available to those who have not owned a home in the previous three years. The credit does not have to be repaid unless the home is sold or ceases to be the primary residence within three years.

According to the Treasury Department, more than 1.2 million borrowers have claimed $8.5 billion of the $13.6 billion set aside for the first-time homebuyer tax credit.

Please be advised that this legislation has not yet passed, but I will be sure to keep you informed as it moves through Congress toward approval.

My Thoughts:  Hurray!  This is great news.  I am really excited about the fact that they are most likely going to also allow move-up buyers to take advantage of the program with the $6,500 tax credit.  I think this is just what we need to keep home sales active during the slow season and really get them fired up during the Spring.  Let’s just cross our fingers that the House approves it too!