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Stocks, Bonds and Boston Condos

Posted by Scott Van Voorhis August 20, 2014 08:51 AM

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Why buy stocks and bonds when you can snap up a downtown Boston condo and do about as well?

Plus, you will have an awesome place to live while you count your money.

Measured simply as investments, Boston condos match up pretty favorably with the performance of the S&P 500 and some futures commodities, such as hogs.

New condo versus pork bellies? No contest there!

The average condo price in Boston has risen more than 71 percent since 2000. At the start of the 21st century, the average condo price in downtown Boston was $438,000. By the end of last year, it has hit nearly $752,000, notes Kevin Ahearn, head of top Boston condo marketing, research and brokerage firm, Otis & Ahearn.

That factors out to a compound return of 3 to 5 percent. In fact, the only time the market hit a snag was in early 2009, when impact of the financial crisis finally hit home in the real estate market.

But it turned out to be only a temporary pause in a long, upward climb, Ahearn notes.

"It's a very compelling number if you think about what's happened in the world," Ahearn says.

It's also not bad considering Manhattan condos churned out an annual return of 6.5 percent over the last decade, while the S&P 500 averaged 5.56 percent, The Wall Street Journal reports in its Spread Sheet column.

Commodities were a little harder to beat. Boston condos stack up well with hogs, which had a return of 5.3 percent.

But gold and oil are still king, weighing in at nearly 13 and 11 percent respectively, the Journal reports.

This blog is not written or edited by or the Boston Globe.
The author is solely responsible for the content.

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Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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