There are many benefits to living in Boston's smaller condos
The phrase “less is more” - at least in terms of living space - is not falling on deaf ears among urbanites seeking homes in Boston’s sizzling real estate market. In fact, “tiny” homes, some with as little as 500 square feet (or less) of living space, are hot commodities right now.
In June, for example, a Beacon Street studio (at the 450-square-foot mark) was spoken for only two weeks after it hit the market. Price - for buyers and builders - is certainly one reason keeping these smaller homes in the fast lane.
In a city where housing costs are booming upwards, Elliott Levine of Olde Forge Realty points out that “studios are affordable.”
LINK reported that in the second quarter, the average selling price for a studio condo was $572,021 while one-bedroom units went for an average price of $700,295. Both are a lot less expensive than the average selling price of a two-bedroom home, which was $1,089,431. And the average selling price of the large three-room condos was $2,350,696.
Parents often buy the smaller homes for their kids who are in grad school as an option to “renting” an apartment. After graduation, parents can sell the unit (usually for a nice profit), keep it as a rental or let the student use it as their “first” home in the city.
Using these smaller homes strictly as investment ventures is popular. One reason, explains Robb Cohen of Engels & Völkers, is that these are hardly risky decisions.
“You can always rent them,” he says, adding that studios are, and always have been, desirable housing options. They account for approximately 10 percent of sales or 45-to-50 percent some years.
“It’s a pretty steady market,” adds Levine.
During the second quarter, LINK reported that studio condos stayed on the market an average of only 10 days before being sold. One-bedroom units lasted an average of 60 days. Compare that to three-bedroom condos that needed an average of 95 days to sell.
Numbers tell the story. According to New Urban Mechanics, Boston’s research and design lab established in 2010, studios and one-bedroom units make up one-third of the city’s housing stock. The number of single people and couples, however, represent two-thirds of the city’s population.
Cohen agrees, noting that many of today’s current buyers want city-living once again - sort of.
“They bought larger homes outside the city during the pandemic, but now they want back in,” he says.
However, that doesn’t necessarily mean they want to be full-time city dwellers.
Here is where the living scenarios get interesting. Some choose to live in-town on Mondays through Thursdays or Fridays, then head back to the suburbs for a longish weekend.
Others might choose Tuesdays through Thursdays, scheduling face-to-face appointments and/or meetings on those days while reserving more “office” work at home time on either side of the weekend.
Whatever the disposition of the working week, the bottom line is that the amount of living space one or two people “need” part-time is significantly smaller than the standard two- or three-bedroom condo.
Even better is that in comparison to their larger precursor - the classic loft - today’s studio tends to be very efficient.
“They live just as well as a 600-square-foot unit because of the way they are laid out (closets and storage space do exist),” says Jennifer Frizzell, Director of Research at Boston Realty Advisors, noting that residents themselves are willing to live with less.
Out-of-towners, for example, who like what Boston offers - restaurants, theater, art galleries and shopping as well as the hustle and bustle - but may not want it full-time are another group who opt for a “second” in-town home. A small personalized pad rather than a homogeneous hotel room fits the bill.
Enter the wonderful world of studios and their larger cousin, the one-bedroom apartment/condo and the biggest appeal - affordability. While that might seem like an oxymoron in the current Boston real estate market, it’s all relative.
“The price point is lower,” says Levine, making it easier for first-time buyers (especially non-students) to enter the Boston market. Frizzell points out that condo fees are also lower.
Investors, a.k.a. landlords, are also attracted to these little homes for the same reasons: they are easy to rent/lease today, have a strong rental history and, they are affordable. What makes these all-round winners is that everyone involved, including builders and developers, finds that studios make great financial sense.
That a building or complex can contain more studios and/or one bedroom vs. two-or-three-bedroom units seems obvious, but a number of hidden perks also make these homes attractive to builders. Buildings have less “wasted” space, for example, as smaller units can be more uniform.
Parking - the bane of Boston drivers and residents - is also a non-issue for developers who opt for one-and/or no-bedroom (i.e., studio) units.
Frizzell explained that today’s city regulations require one parking space for every two-bedroom home. Builders avoid the struggle to find parking space (be it underground or above) as well as the expense of building it, which can be pricey, by focusing on studios and one-bedroom units.
“Most studio owners take public transportation,” says Brad Braunstein, Portfolio Manager at Boston Realty Advisors, “but if we have parking to sell, people sometimes buy it.”
With or without parking, however, the studio boom is not expected to go bust any time soon.
Enter the real bonus, explains Braunstein: more money for developers.
“In Boston, studios earn a greater price-per-square-foot than a one-bedroom” he says, thus making these developments highly attractive to investors.
Once again, money talks.
Consider that studios in the South End, for example, can average $1,319 per square foot compared to $1,049 for one-bedroom units while in Back Bay those prices can be $1,284 per square foot for studios vs. $1,206 for one-bedrooms.
Overall, the average price per square foot for a studio condo was $1,210 in the second quarter, compared to $934 per square foot for a two-bedroom and $1,094 for a three-bedroom.
Another plus for people who buy studio or one-bedroom homes in the larger luxury lifestyle condo buildings, such as One Dalton or Millennium Tower, is that there is plenty to do outside the unit without having to leave the buildings.
Many of the larger condo buildings offer great amenities such as common rooftop decks, swimming pools, movie theaters, fitness centers, libraries and function rooms as part of the monthly condo fees. This makes living in a smaller space feel like you’re not really living in a small home at all. And unlike living in a large house where the owner is responsible for the upkeep of all those great features in and out of the home, condo owners aren’t responsible for cleaning or maintaining the pool or any of the other common areas.
Buy small, yet live even bigger! Expand your living and entertaining quarters within and outside of the building itself.
Whether you prefer being closer to the visual or performing arts, tantalizing restaurants and chic boutiques, cheering on your favorite sports teams or walking/boating in the splendor of nature (just to name a few options), there will always be something of interest to explore and enjoy, whether you live full-time or part-time in your little oasis in the city.
Couple the ongoing popularity (and convenience) of these smaller homes and location in some of the most desirable parts of the city with their financial benefits to owners/renters, builders and investors, odds are that studios will continue to be a mainstay of the Boston real estate market.