Scott Van VoorhisDon’t bet against real estate, especially the Boston-area variety, in the wake of the diabolical Marathon bombings.

From home sales to blockbuster office tower deals, real estate hit historic highs in the years following the 9/11 attacks, both here in Massachusetts and across the country.

And there’s every reason to believe we are poised to see a repeat, both in Greater Boston and nationwide, in the months and years ahead.

Sure, life as we know it – open houses and home inspections included – ground to a halt in Boston and the inner suburbs during the week after the bombs went off on Boylston Street.

But home and condo buyers and sellers are already in the game again in Boston, and never really stopped once you got into the suburbs past Newton and Watertown.

In fact, the weekend following the marathon tragedy and epic manhunt/shootout was one of the busiest ever, with bidding wars and busy open houses.

If anything, such spectacularly evil acts of terror, far from crippling us with fear, may only whet our appetite for tangible assets, whether it’s a new home or a new skyscraper.

“It was crazy busy,” said Thomas Skahen, co-owner and founder of Littleton-based PrimeTime Communities, of the week of the marathon bombings. “It was crazy busy everywhere.”

 

Home Buyers, Investors Undaunted

Osama surely hoped leveling New York’s two tallest towers would wreck the American economy.

Well, it backfired, big time. The attacks not only made our country hopping mad, it also had the more pedestrian effect of awakening our “nesting impulse,” as one economist puts it.

Instead of going into hiding, once the initial shock of the attacks wore off, consumers and investors alike went on an epic spending binge, with big, supposedly vulnerable cities like New York, Chicago, and yes, Boston too, leading the way.

And at the top of that shopping list, for many consumers, was a new house or condo.

By 2002, barely a year after 9/11, it was clear to anyone out looking for a home in the Boston area that something fundamental had changed, with modest homes suddenly attracting hordes of bidders.

By 2006, Boston area home prices were up 80 percent over where they stood just six years before, at the start of the decade, according to the Case-Shiller index. The talk was of million-dollar fixer-uppers in Newton and half a million dollar au pair suites in some of the newly built, deluxe, downtown Boston condo towers that were taking shape.

It took a bit longer for the office market to pick up, but it too surged, sending prices skyward with eye-popping deals like the $1.3 billion that a New York investment firm shelled out for the Hancock tower back in 2006.

Certainly the 9/11 attacks and their aftermath were not the catalyzing factor behind the real estate boom, though the low-interest rate policy pursued by the Federal Reserve after the attacks may have helped set the table.

But it would also be hard to argue that the security and comfort of real estate – especially when talking about a home and all it represents – didn’t have a special appeal at a time of high anxiety about the future.

 

Mayor Thomas Menino gets Boylston Street back.A Post-Marathon Real Estate Boom?

Just two weeks out, it’s too early too predict exactly how the marathon bombings will impact the national psyche and what spillover effects that might have on the real estate market.

But it’s already clear the Marathon bombings aren’t doing to derail the real estate market, in Boston or anywhere else.

And yes, the concept of owning your own home, in which you can “shelter in place” in reasonable comfort with family and friends, may once again take on a new allure.

“The bombings could inspire a nesting instinct and encourage people to invest more in their homes,” wrote Jed Kolko, Trulia’s chief economist, in an email.

Then again, in the same paragraph, he also argued the attacks could hit consumer confidence and ultimately hurt the housing market, so go figure.

 “With the bombings still so recent, it’s hard to say what the effect might be,” he wrote.

Whatever the case, it is not that clear our increasingly overheated home sales market really needs any more encouragement.

Bidding wars are the norm now for homes and condos in highly sought and after locales, such as Cambridge, Arlington, Newton, forcing buyers to up the ante or look farther out into the suburbs.

Home prices are starting to really take off again as well, with the median price for a home in Massachusetts jumping 8 percent in March, according to The Warren Group, publisher of Banker & Tradesman.

The office market typically lags given that it’s more dependent on new job creation, but the upward trend is clear to discern here as well.

OK, we’ll just have to wait and see what happens.

But in troubled times, I’ll put my money any day on that old “nesting impulse” making a comeback.

Email: sbvanvoorhis@hotmail.com

After Attack, A Nesting Impulse

by Scott Van Voorhis time to read: 3 min
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