Will Cambridge or Somerville Have the Hotter Real Estate Market in 2015?
Cambridge typically has higher prices and demand, but Somerville is coming up fast.
Which city is hotter right now, Cambridge or Somerville?
It is a question that will be increasingly hard to answer in 2015 as Somerville’s super hip real estate market increasingly steals some of Cambridge’s mojo.
Somerville condos posted bigger price gains in 2014 than Cambridge condos, while the number of sales rose in Somerville amid a flood of new construction and condo conversions, the latest real estate numbers show.
Cambridge, by contrast, saw a dearth of new construction and limited listings hitting the market.
Either way, both cities are likely to see big price gains in 2015 as demand to live in neighborhoods like Davis and Porter squares far outstrips the number of available condos and homes.
“People really want the farmers markets, the arts community and the music scene that have grown up around some of these neighborhoods,’’ said Alex Coon, market manager for web-savvy brokerage firm Redfin’s Boston-area office.
Somerville prices racked up some amazing gains in 2014, with the median condo price hitting $472,500 after a 15 percent jump, The Warren Group reports.
Cambridge prices rose 13.8 percent, with the median rising to an even loftier $567,000.
Yet when it comes to sales, it was truly a tale of two cities. While Cambridge condo sales plunged 20 percent, Somerville saw a 12 percent increase in the number of condos changing hands, Warren Group numbers show.
Some of the increase likely stems from condo buyers getting priced out of Cambridge and looking for alternatives in Somerville.
But Somerville is not only a bit more affordable than Cambridge, the city also has a lot more new residential projects taking shape, something hard to find in Cambridge.
Sure, Cambridge has some new stuff, mainly high end rentals in Kendall Square and Fresh Pond. But new condos are few and far between, which helps keep prices rising even as sales fall, brokers say.
By contrast, Somerville just has more happening right now, from big mega developments to conversions of apartments into condos.
A massive development boom is reshaping the Assembly Square area, where a new Orange line station just opened in September. The 56-acre Assembly Row project includes new apartment buildings and dozens of stores and restaurants, with Partners HealthCare building its new headquarters there as well.
A $1 billion redevelopment of Union Square is also in the works, with plans for more than 2 million square feet of new development over 12 acres.
Meanwhile, a range of developers, from mom and pop operators to big developers, are snapping up two and three family rentals and old garage and industrial buildings in Somerville and converting those into condos as well, Coon noted.
Examples include a former auto repair center on Somerville Avenue that was torn down to make way for three-family, upscale condos taking shape in a former warehouse on Prospect Street, and a dry cleaners shop knocked down on Highland Avenue to make way for residential construction, he said.
“We are seeing a ton of that,’’ Coon said. “More developers are pouring into these neighborhoods than I have ever seen, maybe back to the early bubble days.’’
And with the economy on a roll and interest rates still low, 2015 is shaping up to be another hot year for prices in both cities as well.
A growing number of sellers in Cambridge and Somerville aren’t waiting for spring to list their properties, with an unusually large number of listings having hit the market in the first two weeks of December, said Sara Rosenfeld, a veteran Coldwell Banker real estate agent who has been selling real estate in both cities since the early 1980s.
“It was more than I have seen in a long time,’’ she said.
Somerville is expected to see price gains ranging from a solid 6 percent increase to 10 percent or more depending on the neighborhood.
“There are a lot of reasons to feel confident about a significant appreciation for Somerville condos in 2015,’’ writes said David Bates, a top Raveis broker and market observer who writes The Bates Real Estate Report. “There’s the continued work on the Green Line extension that will put some Somerville neighborhoods on the map for buyers … the increasing popularity and jobs Assembly Row will bring, the continued cool vibe and restaurants of Davis Square, and Somerville’s leadership that keeps the short term pulse with its eye on the long game.’’
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