To many residents’ dismay, Boston is the second most expensive city for people purchasing real estate, according to a study conducted by Business Insider.
The study concluded $1 million could purchase 2,092 square feet in Boston. Even New York City is more affordable than Boston. The only city that was ranked more expensive than Boston was San Francisco.
Kevin Lang, professor of economics at Boston University, said there are three factors that drive up the prices of real estate in cities.
“Boston, New York and San Francisco all have considerable high technology and people with high incomes,” he said. “That increases the prices at the high end up the market. These cities all have great amenities and they are all places where their is a limited ability to increase density.”
Lang also said denser cities, such as Manhattan, are more expensive because it is difficult to build new construction whereas in less dense cities, such as Las Vegas, there is much more room to build more affordable construction.
Justin Grammer, a senior sales and leasing agent at A&S Realty, Inc. in Boston, said Boston is so expensive because the demand for housing is much greater than the supply. The high demand is the result of all of the universities, hospitals and industry in Boston.
“The supply is limited and that is what drives the prices up,” he said. “There are more and more people coming to Boston and not enough places for them to live.”
David Xiao, a broker at Meridian Realty Group, said that cities with high real estate prices, particularly Boston, attract a large group of people that includes college students because of all of the universities, international people and investors.
“Those cities are also more international and friendlier to new locators and non-English speakers, which makes them attractive places to live,” he said. “We have so many universities in Boston and a lot of investors as well as consumers. Investors purchase real estate and then sell it at high prices to consumers”
Many residents said they have been affected by the exceptionally high cost of real estate, and it can be a burden to afford.
“[The cost of hosing] has impacted me in trying to get a second job, in trying to be a part of affordable housing, but even if I make good money I can’t afford to live here,” said Monique Goodman, 46, of Roxbury.
Heather Tifrere, 55, of Dorchester, said she has been living in Boston for decades now and she has never seen prices this high before.
“I’ve been here for almost 40 years and this is the worst,” she said. “I’ve never seen it this bad and it just continues to get more and more expensive. People who have been here for a long time cannot even afford to stay. It’s really sad.”
Michael Burk, 33, of Brighton said he is currently shopping for a home in Boston, but is starting to think that it makes more sense to relocate to the suburbs.
“[Boston is] a major U.S. city,” he said. “There are a lot of resources here, a lot of universities and a lot of nice places to live. I guess that justifies the prices a little bit, but it’s still outrageous.”