The Davis Square Community

The Davis Square Lofts are very nice but way overpriced! The Davis Square Condos look nice too but unless you have a $140,000 job they aren't worth it.

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The Davis Square Lofts are in a different league than the Davis Square Condos in terms of the build quality--at least the renovated factory portion. I have some friends that used to own there and their place was spectacular. They sold at the top of the market a couple of years ago for an amount that would make you cry. The buyer--incidentally, a young person of about 30--paid cash.

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I've been over to the Davis Square Lofts and I really do like them, but the quality isn't as good as you think. The metal stairs outside aren't very good but the interiors are excellent.

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I totally agree. My impression is that the developer is a company dedicated to doing something really well but they keep running out of money, so while some stuff is great, other stuff is, eh, not so. But the inside of the unit I went in could hardly have been nicer.

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The funniest thing is when I checked them out 4 years ago and the sales guy said "We are revamping our website soon with the latest data". 3 years later the website was finally revamped.

For the longest time they had this basement level condo for sale for around $419,000. I'm not sure if it ever sold.

Is there a way to check to see what units sold there? Zillow seems to be missing a lot of information about them.

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witzwurst.livejournal.com

Are those metal stairs the only way to get into the units? Sounds like a wintertime nightmare.

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prunesnprisms.livejournal.com

They do open houses frequently; you could just stop buy and look at them. We did--not impressed for the price.

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On the splash page of the Condo's website a cute 20 something couple is depicted gazing in to a laptop. Who in their 20's can afford a 414K - 779K for a condo plus the associated fees and taxes? Am I the only one around here who has the feeling that the cost to own in our town is just wack?

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ron_newman

The rest of the USA is having a real estate crash. How is Somerville avoiding it?

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Although sales have certainly slowed prices have only come down on average of 2%. Prices are still double what they where 5-10 years ago.

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unsi-sempai.livejournal.com

I've heard that it's because there is no land left to develop, and so people looking to make money off of real estate are either renting out their units or renovating into "luxury" housing. It's certainly extremely frustrating that I can afford to rent on the street where I live, but a similar unit recently for sale a few doors down was listed at $519,000 - WAY out of my price range.

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Who in their 20's can afford a 414K - 779K for a condo plus the associated fees and taxes?

Someone who just took out a stated-income, negative-amortization loan with an introductory teaser interest rate that resets upwards by 50% in three years, and plans on making only the minimum payment due.

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ron_newman

That would be called a "sub-prime" loan, and aren't those no longer being offered?

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mrboboto.livejournal.com

You can't even get an 80/10/10 loan these days (which isn't that risky compared to some of the subprime lending that went on), much less something like that poster describes.

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...that would be why those places aren't selling. Because risky loans are the only way ordinary people can afford to pay those kinds of prices.

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mrboboto.livejournal.com

Perhaps you misread my post - I was agreeing with Ron that you can't even get a slightly risky loan, much less a very risky loan.

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Yup, and if people can't get loans--the places don't sell.

There's no way someone with a $75k income should be able to buy a $600k property, absent a serious windfall like lottery winnings or an inheritance. The rough guideline that existed before the insanity of the first half of this decade was that you shouldn't borrow more than about 3-4 times your income. In the housing boom, though, banks abandoned that principle to their downfall and lent people much more money than they ordinarily would have. This had the effect of inflating home prices.

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derekp.livejournal.com

I got an 80/10/10 on condo (harder than a single family home from what I'm told) in June. A lot has change since then, though.

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I spoke with a lender recently who told me there are only two large lenders that will still do an 80/10/10. That's the thing that concerns me most about the current market. Interest rates are still quite low, so from a monthly payment and cash flow point of view, buying is still a good deal for many people compared to renting. But coming up with 20% for a downpayment instead of 5% or 10% is a huge hurdle for first-time homebuyers. I know when I bought, the monthly payment was easy but I had to scrape, scrimp and lean on family for just 10%. As someone that will be looking to sell my perfect for first time homebuyers condo in the next year or two, I'm bummed.

An anecdote regarding the change in lenders' attitudes: I recently refinanced, and inquired with ING about their rates. I was informed that ING wouldn't go higher than 60% loan to value ratio for a condo refi, and since my LTV was 62%, they couldn't give me a loan. 60%!

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witzwurst.livejournal.com

Just because you can't get an 80/10/10 doesn't mean you can't necessarily buy with 10% down. Before 80/10/10s existed, people just got 90/10s and paid for PMI.

I have no data on the availability of 90/10+PMI loans these days, but they are considered significantly less risky than 80/10/10s.

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ron_newman

what does "80/10/10" mean?

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narya.livejournal.com

It's [first mortgage]/[second mortgage]/[down payment] so 80/10/10 would mean that 80% of the purchase price was financed with a primary mortgage, 10% was a secondary mortgage, and 10% was the down payment. Or at least that is my understanding of what that means.

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The term "sub-prime" actually correlates with the credit rating of the borrower (usually, FICO < 620), not with the terms of the loan.

There has been a general sort of contraction in credit; people with lower FICO scores are finding it difficult to get any kind of loan.

Negative-amortization loans actually *are* appropriate for some people. They're good if your work is seasonal, or your income is irregular--think of someone who gets paid irregularly for completion of a few large contracts over the course of a year. You can make the minimum payment when you're lean and make up the difference when you're flush. They're *not* appropriate as "affordability products" for people who earn a regular paycheck and who can't afford to make a fully-amortizing payment.

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derekp.livejournal.com

Uhhh... me? And the guy who bought the place upstairs from me? Granted, we're in our late 20's.

There are plenty of people who can afford these places without relying on a bad loan. That said, the place I got for the money is way nicer than the places they're offering. I think they're out of their minds. There's a WORLD (or perhaps even two) of difference between 414 and 779.

We looked all over, without heading too far out into the burbs. Somerville, Arlington, Cambridge, Watertown, Newton, Waltham... The prices in this town are no more outrageous than prices just outside it, from what I can tell.

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narya.livejournal.com

Yeah...

I bought a place in (the low end of) that price range in my twenties. I bought with a friend and we chose to have additional rent-paying roommates, so it worked out ok for us. It's not something everyone would want to do though.

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shayshiny.livejournal.com

Frankly, a lot of people in the Boston area in their twenties can afford a condo in that range. If you've got two people both working in high tech, for example, they could both be making 75k+ easily in their mid-late twenties. A 400-something K condo nets out to about 2100 a month plus property taxes ($300/month give or take) and condo fees (let's say $200) if you do 20% down. So, you're paying about $1300 a month each.

That's about what a one bedroom around here goes for. If you had each lived alone before buying a place, you could actually be saving money and living in a much nicer place.

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True... but what happens if one of those 2 with the high tech job gets laid off ( not unheard of in this volatile job market ). It would be not long before you would be in trouble when you are counting on 2 75K incomes to pay the $2600 per month for a place to live.

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derekp.livejournal.com

The same exact thing that happened to our parents when one of them got laid off when they had a $100,000 house...

You go get another job.

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Actually when my parents bought their house the cost of housing was proportionally so much less that my mom's meager part time income was not needed at all to pay the mortgage. My dad was just a postal worker. Imagine that... the guy delivering your mail, actually able to buy a home just on his income.

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shana-lyons.livejournal.com

One would hope that the person purchasing the home was smart enough to lay in an emergency fund prior to purchasing the home. But, in theory, someone making 75k a year could pay a $2600 a month morgage themselves for a few months. Their income divides out to $6250 a month, so even if 30% went to taxes, etc they'd still be netting approximately $4000 a month. It would be ugly, and the out of work person might need to do some temping to keep all of the other bills paid, but it's not totally unworkable, especially if there are no other debts like car payments or credit card balances.

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ryanwanger.livejournal.com

According to some other posters around here, 3 of the units don't have certificates of occupancy because the developer did not follow their original plan. Also, one of the units was affordable housing, so it sold for less than $200k. You can find the info if you look up property records for 135 Willow at http://www.masslandrecords.com

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tt02144.livejournal.com

FYI-The Somerville Chamber of Commerce web site has some interesting information on Somerville (and some other places around the country) that are avoiding the Real Estate Crash. Location, location, location. I agree with everyone about the quality of workmanship of the Davis Sqaure Condos. That building owns lots of property in and around Davis Square and is not known for working reasonably with the city or the neighbors (hence the 'holdback' on 3 units!), or for doing quality work. He tends to do what will make it appear to look nice, but if you're smart or knowledgeable, you'll see right through it. By the way, he just changed his mailing address to the Davis Square Condos address - could he be moving in himself (that will make it appear that more units have been sold)??

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There is another condo development that I know of further out where the builder moved into the condo development and sold his home. So instead of reducing prices to sell, he sold his home and only 2 out of 16 units are sold.

It seems to me many builders are extremely reluctant to reduce prices and are doing everything they possibly can to not reduce their price.

I think renters have the upper hand because all we have to do is sit and wait and pay off our other bills and put our money into savings. The renters will win!

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fefie.livejournal.com

Housing costs in Davis Sq have been higher than the rest of Somerville for several years, but it is alarming to see developers in recent years making inroads in driving up the cost of housing further into Somerville. (Labeling a condo complex "Davis Sq condominiums" which is not in Davis Sq, but charging Davis Sq condo prices is one example.)

I don't know much about real estate trends -- but I've lived here for a long time and it's scary to know I would not be able to afford to buy a home here now if I had to.

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