Trying to turn renters into buyers in Dorchester
As developers chase potential buyers, they are getting aggressive with the incentives.
I mean really aggressive.
Just take the Carruth, a new residential complex in the Ashmont section of Dorchester that had the misfortune to open just as the real estate market was starting to fall apart.
Trinity Financial has sold just a handful of units, renting the remaining 36 units out.
The developer has already cut prices – down to the $239,000-to- $399,000 range, down from $299,000-to-$499,000 previously.
Now Trinity Financial is rolling out two more incentives in a bid to turn renters at the Carruth into buyers.
Renters interested in buying now have the option of putting three months rent – at an average of $1,800 a month – in an escrow for use in closing costs or in making a down payment.
That still leaves another big hurdle – the 20 percent down banks now expect from condo buyers.
Trinity Financial will now cover three quarters of that down payment on a $229,000 unit – or $34,350 – through a loan to the buyer.
Independently, the developers note, there’s also the $8,000 a year tax credit from the federal government and a $1,400 city residential tax credit.
It’s quite the sales pitch, but will it work? While there are signs home sales may be starting to pick up again in the Boston area, Dorchester has been one of the hardest hit neighborhoods in the Bay State when it comes to foreclosures.
There are a lot of foreclosed condos out there and they are going for a lot cheaper than even what the newly reduced units at the Carruth.
That said, you get what you pay for, and a $50,000 foreclosure special may cost you another $200,000 or more to make habitable.
Nor are there a lot of new, market rate residential complexes like the Carruth out there to pick and choose from in Dorchester.
We’ll see how it works out.
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Thanks, but I'll pass on Dorchester... Not my cup of tea.
On another topic, anybody catch the excellent and very informative article in today's Wall St. Journal about how the high end market continues to get crushed? ("High-End Homes Frozen Out of Budding Housing Rebound" by NICK TIMIRAOS and JAMES R. HAGERTY).
As regulars on this blog know, this particular topic has been a recurring theme in many of my posts. I highly recommend.
Ah Yes, these troubled condo deals.
I have seen prices drop at DNA lofts but I dont think the drop is enought yet. I like the location, I like the building but the prices are not much less than what recently was auctioned off in the South End.
Time will tell what happens with DNA.
I thought 25% down was now the standard (but for condos only, because of the significant downside risk, which is obviously much higher now than it was in 2005 according to the risk assessment "experts").
This is in my neighborhood (just down the street, actually), and even with the reductions and incentives, it seems high for the neighborhood. I've been told by a Realtor who toured the building that it's quite nice inside. Still, it's hard to imagine who will live there. It certainly comes as no surprise that it didn't sell at its original price levels. Most of us just walked by the banner that first announced the price range and shook our collective heads. Did they build in the same Ashmont that we live in? I'm sure it will be good for the neighborhood if they do sell. Good luck to them.
I currently rent in the Carruth and may consider buying in there. Yes, quite nice.
Bank of America is lending a potential buyer on a house I own 97% with only 3% down requirement. The potential buyer is considered a low-income, first-time buyer - so evidently some banks are not as strict as others when it comes to the down payment!
Dot is nice - but there's nothing "there". Because everyone owns a car, a lot of local businesses are gone. Look at the carruth - you have a dunkin donuts and a liquor store. No corner convenience. Miles to a real grocery store. Just because you're near the red line doesn't mean it's a great location...
The DNA lofts are selling albeit slowly but they are selling. They are tapping into the northern Dorchester location as the selling point. The location is great being a 5 minute walk to JFK T and close proximity to Southie/South End and 93.
I also heard that 25% down is now the standard for condos. What's the $1400 residential city tax credit? The one that takes 1+ years to go into effect?
Ashmont is clearly an up and coming area withTavalo, Flat Back,Ashmont grill along with lower mills close by...the Carruth sounds like a good deal
20% nevermind 25% down for a condo? I hope you guys aren't in the RE industry.
If you have decent credit, you can get 5% down, fixed rate 30 year mortgages all day long from most real lenders (Wells, B of A etc.).
I love Dot- lived in Fields Corner for a couple years. Best Vietnamese food in the city, maybe the best ocean views as well.
That section of Dorchester is prime real estate. Very convenient to the T. But what will dampen the growth/revitalization in that area will be the slow bureaucratic process that entrepreneurs have to go through to get anything done in the state of MA.
Second, the old stereotypes about Dorchester really plays a huge effect on sales.
Finally, the city is not progressive enough to encourage a huge potential mix of diversity in a prime area like the Ashmont section. Boston is a "know your place city". Neighborhoods in Boston do not promote diversity when it comes to living and doing business together. This neighborhood will eventually be 95%Black, I doubt that it will ever have a huge number of white residents again due to the old perceptions that continue to exist in Boston.
The real estate market is soft, but there is more at play here, and its called race.
I took a look at DNA a few weeks ago after the 1850 Auction. Its very nice and the prices seemed to be on average $100,000 less than what sold at 1850. I thought the prices seemed very good actually.
The Caruth is a leasehold, not fee simple property - so it does not have the same deed restrictions as most condos in boston, which will be an issue for any future refi's
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