With the Boston real estate market kicking into full gear in the past few years, centripetal force seems to be exerting its effect, with several suburban brokers being drawn into the Hub.
In recent months, established Cape Cod luxury agents Paul Grover and Robert Kinlin opened their first Boston office. This spring, they were followed by Re/Max Leading Edge, one of the largest brokerages under the RE/MAX flag. Leading Edge’s new Back Bay office is its 12th. And just last week, newly independent Laer Realty Partners launched its first Boston office, opening in West Roxbury. There will be more to come, promises Laer co-owner Andrew Armata, saying the firm plans to open a Brookline office as well.
“My philosophy on it is that if you want to be a regional real estate powerhouse you obviously have to be in the big city,” said Armata.
Part of the draw for suburban brokerages is the same reason Willie Sutton apocryphally gave for robbing banks – it’s where the money is. With low inventory remaining a concern across much of the Bay State, the luxury condo building boom makes Boston one of the few places with fresh supplies of housing, and the deep-pocketed buyer pool ready to snap it up.
A look at data provided by The Warren Group, publisher of Banker and Tradesman, shows that over the past five years, while the number of residential transactions in the city has stayed steady relative to the rest of the state – in 2009, 9.1 percent of all home sales in Massachusetts were in Boston, versus 9.6 percent year to date in 2014. But the volume of those transactions has steadily increased, rising from $2.6 billion in 2009 to $4.5 billion in 2013. In 2009, Boston sales made up 11.4 percent of the total residential sales volume in the Bay State – so far in 2014, they’re 15 percent. And with thousands more luxury condos in the pipeline, an even bigger chunk of the total commissions available for agents will be found in Boston in the years to come.
Those numbers have plenty of brokers eyeing the market. Part of the reason they decided to open a Boston office after years of success on the Cape was the realization that over two-thirds of their clients listed Boston as a primary residence, said Paul Grover. “We felt we had maxed out on the Cape,” added Kinlin, making expanding to the Hub the natural next step.
Sharing The Limelight
Many brokers think there’s room in the city market for a different model. Boston brokers, particularly at the high end, are often boutique operations centered around a single star agent; all the brokerage’s listings are usually under their name. For hungry young agents looking to establish themselves, a brand that lets them share a bit more of the limelight has a lot of appeal, said Paul Grover.
Armata agreed, saying that while they’ll always be a role for small brokerages in the city, “we think there’s room to have someone in between that and something like Coldwell Banker, a regional player that covers the entire state.”
A regional brokerage can do a better job of capturing the full lifecycle of a home buyer, contends Linda O’Koniewski, co-broker/owner of Re/Max Leading Edge.
“As you look at the migration patterns of real estate, people often start out renting, in Cambridge, Somerville, Boston, and when they end up buying they usually buy there, and then – we tease, but either they’re dying for off-street parking, they’re nesting, they want good schools and a little patch of yard, so they come out to where we already exist. And then after they raise their children, they want to come right back in. The market does pulsate in and out,” she said. “There’s a lot of Boston agents who come out to the suburbs, and they’re not particularly comfortable there. And vice versa – the suburban agents are scared to death to try to park in town and doing accompanied showings. There’s two different ways of working, but we’re very comfortable with both ways,” added O’Koniewski.
Brokers acknowledge that cracking the intricacies of Boston market is no easy task.
“I do believe that to be truly successful, you need multiple offices and multiple locations [within the city]; in New England we’re still parochial in a sense. We’re not going to have one monster office with 150 people in it. Boston still has local neighborhoods, and West Roxbury and Roslindale are and always will be different from the North End, and you need to have those areas covered by different agents,” said Armata.
But they all expressed a confidence that it could be done. As O’Koniewski put it in regard to their new Back Bay location, “we think this is the key office of [our] entire operation. This is the office that’s going to tie everything together.”
Email: csullivan@thewarrengroup.com
