Analysts divide the world of real estate into residential and commercial
sectors. Residential is single-family houses, residential condominiums, and
small multi-families. Commercial is everything else. For appraisers, the line
of division is fairly strong. Residential appraisers don't appraise commercial
properties, and commercial appraisers leave residential to the residential experts.
But that is not to say that we turn a blind eye to each other's worlds. A
residential appraiser needs to be on the lookout for the house that may be
sitting on a piece of land that has much more value as the site for a restaurant
or a bank branch. For the commercial appraiser, the same is true. Houses and
condominiums are our gorilla in the closet. The world is much more full of
residential properties than it is of commercial properties. And where it was
once true that commercial properties were generally more valuable, now that is
less often the case. It is the houses and condominiums that set new price peaks
in the 2010s much more than it is offices and industrials.
Commercial appraisers need an in-depth awareness of residential prices. We need
to always be asking, is this property we are appraising more valuable as housing?.
In this issue of the Reenstierna Associates' Report, we look at the Greater
Boston housing market in three parts: the high end, the middle, and the low end.
Median sales price data and data for individual properties are available from The
Warren Group from 1987 to the present. We want to learn whether these market
segments have followed the same or different price trends. Obviously, all
residential real estate has gone up in price over the last 30 years. We think.
But have all segments gone up at the same rate? Or is it the familiar story that
we find in census and other demographic data: that the rich have gotten richer?
And the rest, not so much? We hope to answer that.
click here for The High End