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
24 Thorndike Street
Cambridge, MA 02141
Eric Reenstierna Associates LLC is a real estate appraisal firm taking on valuation and consultation assignments in Greater Boston, Massachusetts and New England. Eric Reenstierna, MAI, is the office's principal and is a commercial real estate appraiser.
24 Thorndike Street
Cambridge, Massachusetts 02141