The Batterymarch Insider

Batterymarch Group LLC is a full service independent real estate brokerage firm specializing in the downtown Boston market. More about our services here.

“The Batterymarch Insider” is a brief snapshot of our current market thinking. As always, our “terms of use” apply. We encourage you to subscribe.

2022 Market Outlook

Can the Goldilocks Market Continue?

As we head into 2022, we ponder how long the “Goldilocks” environment for real estate values can continue. Having spent decades on Wall Street, we’re the first to acknowledge that forecasting future market moves is generally a humbling task.

Last year in our core markets, Back Bay and Beacon Hill, prices were more or less flat on higher volumes. The Batterymarch Back Bay Index© registered a year-over-year price gain of just 1% on 24% higher volume, although the ultra high-end of the market ($10mm+) fared much better.

The current backdrop of low interest rates and strong financial markets would lead one to believe that the Goldilocks market remains intact. However, there are some things on our radar screen that could derail the story.

Interest Rates, Inflation, and the Wealth Effect

It’s clear that inflationary pressures are going to stick around for a while. The play book to snuff out inflation is pretty straight forward – higher interest rates. The Federal Reserve has indicated that they intend to end quantitative easing and raise interest rates later this year.

Higher interest rates would clearly be a headwind for real estate values. However, since interest rates are so low on an absolute basis, in the near term we’re less concerned about the price of credit. Our concern is more about what higher rates could do to the value of financial assets. Should inflation fears and higher interest rates spill over into protracted stock market weakness, the negative impact on the “wealth effect” is of greater concern to us, particularly for the high-end of the market.

As former Federal Reserve Chairman Bill Martin famously said, the job of the Federal Reserve is “to take away the punch bowl just as the party gets going.” This party has been rolling along for years and we all may be in for a rude awakening should the Fed turn up the house lights and announce “last call.”


City Transfer Tax? Mayor Wu recently unveiled her administration’s housing initiative. The major source of funding for her ambitious programs will be a combination of higher new development fees and a luxury real estate transfer tax. The transfer tax isn’t anything new. The City Council has previously approved the tax, but enacting a new tax requires state approval which has proved elusive.

One of the biggest proponents of the City’s real estate transfer tax has been Lydia Edwards who is leaving her City Council post to serve in the State Senate. Ms. Edwards is a skilled politician and we think that there is a reasonable chance that she will shepherd this new tax through.

Previous transfer tax proposals have been as high as 6% with a 25% “flip tax” on properties held for less than two years. Most recently, former Acting Mayor Janey proposed a 2% transfer tax that would apply to transactions of $2.0 million and higher. We’ve reached out to City Hall for details on the latest proposed transfer tax and we have yet to hear back.

Property Taxes – With the ongoing fundamental decline of our commercial tax base, some have speculated that residential property owners will need to pick up a greater share of the City’s financial burden. Given the pricey agenda of our new Mayor and City Councilors, we expect the City’s financial burden to meaningfully expand.

Construction Boom and Tax Base Growth – Growth of the City’s tax base is a serious concern to us. With all the new construction in recent years, the City has enjoyed explosive growth in the underlying tax base. All one needs to do is take a walk around the Seaport which not too long ago was nothing but endless barren dirt parking lots (see our report, The Great Boston Building Boom).

We don’t see new construction coming to a screeching halt, but even a modest slow down in the rate of new construction could result in a budget shortfall. 


Several national real estate platforms recently announced that they were going to stop publishing crime statistics on their websites. We’re in the camp that whenever anyone tells us “there’s nothing to see here” our antennas go up.

If you’re interested in crime, we’d encourage you to look into the app “Citizen” which reports public safety incidents in real time. While the app may not be 100% accurate, it gives you a reasonably good sense about what’s going on around you.

In her book “The Death and Life of Great American Cities,” Jane Jacobs states that “It does not take many incidents of violence on a city street, or in a city district, to make people fear the streets.” In essence, the perception of public safety is as important as actual safety.

We think of Boston as a safe city and we have not seen the increase in crime that has plagued other large cities.  But like all major cities, crime is a fact of life and situational awareness is key to urban survival. A meaningful pick up in crime rates would obviously not bode well for real estate values so keep an eye on trends.

Public Health

The year-end Covid flare up is a sobering reminder that we’re not out of the woods with respect to the pandemic. The longer the pandemic drags on, the more damage is being done to many of the things that make urban living attractive. Restaurants, retail, museums, and theaters continue to operate under financial stress.

It remains to be seen just how committed employers are to maintaining a large downtown presence. Eaton Vance recently announced that while they’re keeping their headquarters downtown, they’re shrinking their footprint by about 20% when they relocate to One Post Office Square. Due to the long term nature of commercial leases, it will be some time before we have a clear handle on the longer term health of our commercial market.

Conclusion – Goldilocks Is Alive and Well… At Least for Now

Notwithstanding the risks we’ve laid out, we believe that the Goldilocks environment still has some runway ahead. Our market is currently healthy, particularly from a liquidity perspective. We continue to see attractive opportunities, but we encourage our clients to maintain a value centric approach.

If you’re contemplating making Downtown (particularly Back Bay or Beacon Hill) your home, feel free to reach out to us. As an independent broker largely focused on representing buyers, we’re committed to our fiduciary principals, passionate about valuation, and always happy to share our knowledge.


About Batterymarch Group LLC – Batterymarch Group is an independent full service real estate brokerage and advisory firm focused on the downtown Boston high-end residential market. We represent both sellers and buyers with a sharp focus on valuation. We also offer sub-advisory and owner’s representation services to financial institutions, family offices, and trustees.

About Andrew Haigney – A 25 year Wall Street veteran, Andrew held senior positions at leading global investment banking institutions where he routinely valued and negotiated complex securities transactions on behalf of institutional clients. Andrew has been an outspoken advocate of a universal fiduciary standard. In founding Batterymarch Group, Andrew brings that same discipline and passion to the real estate brokerage.

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