July 8, 2008

Vacation Home Living

I know a woman who works on Wall Street. She bought a beautiful house on a magnificent piece of property in upstate New York, and kept an apartment with several long-time roommates in the city. The house in the mountains was a more modest investment than a Manhattan condo, and a lot of people who could afford the Big Apple were looking towards country retreats in late 2001 and 2002. Prices in Woodstock, NY, almost tripled as waves of urbanites gobbled up property.

In Boston, the rising markets outside of the city were certainly driven by the soaring market within it, and Boston’s affluence rippled through surrounding counties and states. Our house tripled in value, then doubled again, according to the sales history. But this bubble was fed less by the flight mentality of people scared of Fox News’ coverage of “the next attack” and more by economic necessity. There are probably a large number of you living in Boston who fit my friend’s profile – young, with a good deal of disposable income, attached to a 5-minutes-from-home lifestyle. At least some of you aren’t ready to buy that million-dollar condo, and a lot of you are wringing your hands, wanting to take advantage of the down market with your whole HGTV-addicted hearts.

It’s a little irregular to be talking about property outside of Redfin’s sales regions, but I want you to grab a piece of ground as early as possible. If that means a little place in Stowe, or Brattleboro, or Dummerston, or outside Portland, or even in the untamed wilderness of New Hampshire, and an apartment in The City, so be it. It might not make the most economic sense, but it is a tax shelter, and it will send your credit score through the roof, which will benefit you later when you apply for a giant mortgage on a relatively little condo. A cheap property can also be a way to grow your down payment. Remember, you have to think in longer terms – if you’re 5-7 years from being able to buy anything in Central Square, you might think about a smaller and more remote investment.

To those of us who aren’t willing to consign the family’s last Botticelli to Sotheby’s, this might sound nuts. But consider Gloucester, which is accessible by train, a working-class port city sandwiched between two remarkably affluent towns. You can have a house there for a fraction of what a city condo costs – maybe enough to keep living with your college roommates, so you don’t have to decide custody of the shag-carpet-and-plywood bar you built sophomore year.

Of course, practicality might dictate that you split the difference. That’s why we chose to look in Beverly and Salem in the first place. I waved to my neighbor yesterday afternoon as he kayaked out to his sailboat. I took a lot of pictures, and watched the fireworks display my neighbors put on in the little cove across the peninsula. I ate nothing but fried fish and onion rings and roast beef sandwiches all weekend, and my eyebrows are turning blonde.

Carve off these slices of juicy goodness:

41 Front Street, Rear
Beverly, MA 01915
Beds: 2/Baths: 1.5
SQ.FT.: 1190
$ 289,900

38 West Street, #3
Beverly, MA 01915
Beds: 2/Baths:1
SQ.FT.:936
$ 299,000

19 Melvin Avenue,
Beverly, MA 01915
Beds: 3/Baths: 1
SQ.FT.: 1371
$369,000