I live in a four-unit condo near Harvard Yard (see the epic tale of my purchase back in 1996). The ground floor unit recently went on the market for $429,000. Very shortly five bids materialized, all over the asking price. The accepted bid was for $480,000.
What was bought? The broker, from perhaps Cambridge’s largest real estate firm, listed the apartment as 1363 square feet in the MLS (realtor.com entry for 5 Irving Terrace). The city lists 5-7 Irving Terrace, Unit 2A as having 713 square feet and being worth $349,300 (property database). What is actually inside the unit are two rooms: one bedroom plus a combined kitchen/living room. If you hired someone to refinish the floors they might find 500 square feet. How did the realtor manage to find 1363 square feet for this small one-bedroom? An old version of the condo docs had this apartment combined with another. They were later (20+ years ago) split into two separate condos. Folks who showed up expecting 1363 square feet and found a small one-bedroom were apparently not discouraged, though, based on the number of bids.
If we take the city’s 713 square footage, the place sold for $673 per square foot, but in terms of usable interior space I think the total square footage is closer to that of a 500 sf place in a modern building, which gets us to $1000/sf, i.e., what people pay for an apartment in Manhattan. The apartment includes a driveway parking spot, which is a plus, but the kitchen and bathroom would need $30-50,000 of work to bring them into the modern era.
This supports my theory that the suburbs will be abandoned by the wealthy (May 2013 posting) due to the horrific traffic congestion in our metropolitan areas. Rush hour getting out of Cambridge through Alewife now extends until about 8 pm, but you can buy your way out of sitting in traffic if you’re willing to spend $480,000 on a one-bedroom apartment (plus kitchen/bath renovation costs and, very possibly, your share of a new roof (see below)).
Separately, in case you are ever tempted to trust a realtor…. the broker selling the unit had previously been managing the place for the owner as a rental. He thus became aware of an issue with leaks from the 125-year-old slate roof that might cost more than $30,000 to repair and thus result in an assessment to the new owner. The condo’s master insurance carrier had sent a letter refusing to pay for water damage because of “age-related deterioration” of the roof. I asked the realtor if he’d shared the letter, which he’d had in his possession, with the buyer. “No. That’s not my responsibility. It is up to her home inspector to discover any problems.”
[Finally, what do readers know about old slate roofs? At the end of almost every winter there is some ceiling damage from ice and snow melting through the slate/flashing/whatever. There is occasional additional damage from random events, such as a slate being kicked out of place or falling off. We hire a roofer who goes up there, charges us some money, pronounces the leaks fixed, and then departs. We repeat the cycle the next year. An experienced slate roofer (not our regular contractor) told me that the nails on our roof are copper and that they corrode after about 85 years, resulting in the slates being very easy to dislodge. This is why the life of a slate roof is not infinite. He said that the only real fix was to remove the slates, install ice and water shield material, and then reinstall the slates over the ice and water shield with new nails that will last another 85 years. Have any of the readers done this?]