Why Boston Millennials Love New Construction Condos.
New construction condos in Boston and surrounding towns are in hot demand, and are especially popular among millennial buyers. Among my millennial first-time home buyer clients, 40% of them preferred condos built after 1970 and 25% specifically requested brand-new pre-sale condos. In fact, even among my investor clients, 20% of them preferred new construction condos.
New construction condos usually require lower maintenance than older properties. Also, because builders have to apply for the most updated permits and comply with the latest building codes, investors don’t have to worry about older features built a long time ago that don’t comply with modern regulations. Since Boston tends to attract a large influx of residents from areas that have more new construction housing units, there are an increasingly large number of buyers and renters alike looking for modern-style housing.
When is the best time to buy pre-sale condos? My recommendation is to buy them as early as possible because developers usually adjust prices upward as time progresses to match the market appreciation. Prices are usually the lowest at the beginning of the pre-sale period. If you missed the early stage pre-sales, however, it doesn’t necessarily mean you are paying a premium. It means that the price that you pay reflects the demand at the time.
There are pros and cons to buying pre-sale condos, of course. New construction condos generally sell at a premium relative to their existing home counterparts because demand is so much higher relative to the extremely low supply of new construction units. In many cases, you can get a better value for your budget (such as larger square footage, better location, higher bedroom count) if you buy existing condos. Still, many buyers prefer new construction for the reasons mentioned above, and will still pay a premium. They also expect premium returns when they resell their new construction condos due to their high quality and limited inventory.
It’s good to run the numbers with your real estate consultant to determine whether buying a new construction condo is right for you.