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www.bankerandtradesman.com
WEEK OF MONDAY, MARCH 14, 2016
services
and
real
estate
weekly
for
massachusetts
A Publication of The Warren Group BEYOND CAMBRIDGE
COMMERCIAL INTEREST
Suburban Life Science Market Heats Up
WILL HOME PRICES
FINALLY CORRECT IN 2016?
Region’s Lab Vacancies Hit Historic Low
After Some Slowdown In 2015, Markets May Adjust This Year
BY STEVE ADAMS BANKER & TRADESMAN STAFF
A
BY SCOTT VAN VOORHIS | BANKER & TRADESMAN COLUMNIST
G
reater Boston’s sky-high home prices may be finally peaking after an epic run-up that has seen values reach – and in some cases blow past – records set during the bubble years. Then again, maybe they are just taking a breather before rocketing to even more insane heights. The real estate market inside the 495 beltway is at a crossroads, with prices slowing and in some cases flattening out over the past few months, even as sales go bonkers. And with the spring market here, we shall soon have at least a partial answer to whether the slowing prices of late are a real trend or just a passing phase. Svenja Gudell, chief economist at Zillow, is in the slowdown camp. After watching Boston area home prices values rise yet again in 2015, Gudell is looking ahead to a less lofty 2016. She’s forecasting a relatively measly 1.5 percent increase. Gudell sees the slowdown kicking in the latter half of the year after the spring market has shot its bolt. Why? She argues homes in the Boston area are simply getting too expensive, with price increases outpacing what buyers can afford. “I do think at some point we are going to start pushing up against the fact that it is actually quite expensive to buy a home,” she said. “Even smaller increases will start to deter some homebuyers.” There are certainly numbers to back up the slowdown view. While pending sales across Massachusetts were up in February by a whopping 75 percent compared to last year – recall last February’s Siberian interlude – median home and condo prices fell 2.3 and 2.8 percent respectively, the Massachusetts Association of Realtors reports. Home prices have hardly been on a tear over the last few months, either, given what’s happened over the last few years. The median home price in Massachusetts edged down half a percent in January, to $320,000, while condo prices fell 3 percent, to $290,875, according to The Warren Group, publisher of Banker & Tradesman. Overall, home prices across the state rose a relatively modest less than 3 percent in 2016. Moreover, there are also signs that prices have finally hit a ceiling in some of the Boston area’s toniest suburbs. Continued on Page 3
LAST YEAR BROUGHT FALLING PRICES IN SOME HOT SUBURBS Change In Number Of Sales*
Change In Median Sale Price*
Belmont
1.79%
0.89%
Concord
-4.52%
-3.34%
Lexington
4.30%
-2.63%
Lincoln
-14.93%
-9.57%
Sherborn
26.42%
-0.21%
Weston
-3.21%
0.07%
Winchester
16.45%
1.44%
Wellesley
10.92%
-0.23%
Statewide
10.61%
2.87%
* 2014 v. 2015, single-family home sales Source: The Warren Group
CONTENTS
Residential �������������������������������������������������������������� 8
Classified Sections ������������������������������������������������� 13
Points ����������������������������������������������������������������������� 4
In Person ������������������������������������������������������������������ 7
2015 Top Lenders ��������������������������������������������������� 17
By The Numbers ������������������������������������������������������� 6
Commercial & Industrial ���������������������������������������� 10
Records Section ������������������������������������������������������ B1
fter contributing nearly 1 million square feet of development in Cambridge last year, the life science industry is turning up the heat on demand for office, lab and manufacturing sites in the suburbs. Pfizer has put Andover on its short list for a $200 million expansion of its Burrt Road campus. MilliporeSigma recently broke ground on a $115 million build-to-suit office and lab complex in Burlington as it consolidates 800 employees from Billerica, Waltham and Woburn. Irish pharmaceutical giant Shire, which has 1,300 employees at the region’s largest life science campus in Lexington, just leased 177,000 square feet on Hayden Avenue as its Bay State workforce approaches 2,600. “Demand is outpacing supply four to one in the Cambridge market, driving rents in the $80 range,” said Matthew Powers, co-leader of JLL’s New England life science practice. “That is pushing the demand to the suburban markets like it’s never been pushed before.” Greater Boston lab vacancies dropped into single digits for the first time in 2015, ending the year at 8 percent, according to Transwestern’s bioSTATus report. Multiple tenants are looking for 100,000 square feet or more of office and lab space along Route 128 from Needham to Woburn, in an uptick of Continued on Page 10
2015 TOP LENDERS The Warren Group’s annual rankings of the Top Lenders in Massachusetts is here! Banks, credit unions and mortgage companies are ranked by number of loans and loan volumes in a variety of categories. Where does your institution rank?
Find out on page 17.