Cambridge Housing Market Prices Escalate

Brattle Street, Central Square, and Kendall Square are among the most sought after pieces of real estate in the Cambridge area, even though prices have soared to almost unprecedented levels, according to local property brokers.

Last year real estate prices on both sides of the Charles River rose approximately 38 percent for the second year in a row--making the Boston area the nation's second most expensive housing market, industry analysts say.

"Everyone wants to go to the mecca of the east--the six square miles of Cambridge," said Jean Le Vaux, the president of LeVaux Realty.

Le Vaux said she is not surprised at the rapidly increasing interest in the Cambridge area. "People are anxious to get back to where the action is. There is a certain Cambridge mystique; people who have a sense of it don't want to live anywhere else," she said.

Market analysts cite Cambridge's accessibility to the Red Line, its close proximity to downtown Boston, and its two major universities as reasons prospective buyers like to shop for homes in this city of 95,000. Others also argue that the city's policy of rent control artificially inflates the cost of living in Cambridge, factors making this city both attractive and very expensive to live in.

Condominiums at the recently built Charles Square complex, for example, were recently advertised as selling for $850,000 while century homes in Central Square are selling for more than $200,000.

"It's the buyers themselves who are pushing the prices up," LeVaux said. "They bid and compete against each other, which leads to an overall raise in prices."

Lindsay Allison, a sales person with Ingram Rettig Realty, attributes the great interest in Cambridge to an overall recognition of the New England area. "Over the past five years, the Boston area, and most of New England was undervalued on the world market, with New York and California attracting most of the attention."

"Now we are doing a certain amount of catching up for all those years, and the market is really taking off," she said.

Linda J. Rings, an associate at World Heritage Realty, said that low interest rates, approximately nine and a half percent, the lowest since 1978, are encouraging many to invest in homes and condominiums.

"Even young people who would have had dificulties, are finding it easier to afford a home, especially with all the financing options and mortage programs available," she added.

Among the most sought after Cambridge properties, said Alan E. Rosenoff, an employee at University Real Estate, are single family homes along Brattle Street. "The wealthy are most often attracted to this area, withappreciation rates up to the million dollarclass."

Out of Control

The demand for housing is "absolutely crazynow," said Harry B. Johnson, general manager ofRealty World-Litchfield & Associates.

"People are building on every vacant lot theycan grab," said Rosenoff. "Re-sale is very high,higher than in the past seven years. On MemorialDrive, the appreciation rate is up to 40 percent,which is unusual. Normally it is only about 20 to25 percent in Cambridge."

"Babyboom age people are buying heavily, andthere are many more two family incomes on themarket," said Johnson. "A piece of real estatethat five years ago would have gone for $35,000,is currently for sale at $169,000."

Le Vaux said the demand is so great that itcannot be met in the most sought-after regions, sopeople are spilling over to other parts ofCambridge, and even into the outer areas of town,she added.

Real estate developer Anton J. Finelli, ofStuart Ward Associates, agrees with Le Vaux andsaid that there is an increasing demand fordeveloping property away from the city. Thisgrowth, said Finelli, can strengthen the localeconomy. "It is like a shot in the arm for localsocial culture, that comes from having a larger,more diverse population.