---
title: Recession...what recession? Back Bay parking space sells for $300K
description: Parking space behind luxury Back Bay condos sells for a record $300K!  Crazy? Or a great investment? Here's one way to look at it.
---

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# [Recession...what recession? Back Bay parking space sells for $300K](https://www.charlesgate.com/blog/bid/9631/recession-what-recession-back-bay-parking-space-sells-for-300k)

 Written by [Michael DiMella](https://www.charlesgate.com/blog/author/michael-dimella) | Jun 15, 2009 4:00:00 AM

Gotta love disposable income (in the middle of a recession)....Do I even need to write more?

Here's what all the brouhaha is about - would you pay $300,000 for this?:

[View Larger Map](http://maps.google.com/maps?oe=UTF-8&sourceid=navclient&q=48+commonwealth+ave+boston,+ma&ie=UTF8&split=0&gl=us&ei=B1sxSuXPMtqwtgeflPz1BQ&ll=42.362222,-71.069527&spn=0.00069,0.001515&t=h&z=14&layer=c&cbll=42.352464,-71.073384&panoid=gxblOY-36cq2nQnl-iXZmQ&cbp=12,332.76,,0,9.06&source=embed)

Since there are more than enough comments by readers on the [Boston Globe](http://www.boston.com/business/articles/2009/06/11/300000_price_sets_record___for_parking/) and [Boston Herald](http://www.bostonherald.com/news/regional/view.bg?articleid=1178216&format=comments&cnum=3) sites trying to answer that question (most of them idiotic as usual so take a look if you're in the mood for a chuckle), you probably don't need my opinion on it, so I'll keep it brief and take a slightly different approach.  As for the personal decision to spend $300K on a parking space (uncovered, by the way) behind 48 Commonwealth Ave, well, let's just say this is still America and if you've got the money, who am I to tell you what to spend it on?  I can probably think of other things to blow $300K on, but if parking is what you're into, enjoy!

 

**But from an economic perspective, does this purchase make *any* sense?**

First, if the spot was 20' x 10' (a very nice sized parking space), then this buyer just paid $1,500 per sq foot for land!  That equals the price per foot of a handful of exclusive Boston luxury condo buildings!

I assume the buyer paid cash for the spot, but let's use a typical investment property cash flow example....if you put 25% down on this purchase, you're looking at a loan amount $225,000.  Even at today's low mortgage rates, you're looking at a monthly payment of $1,250 or so.  This spot could typically rent for $300-$350 per month, so in this scenario you are looking at a loss of $900 per month!  Nothing like praying for appreciation I guess.

Then what could a buyer count on for appreciation?  To give us an idea, here are average prices for parking spaces in the Back Bay since 2004 (according to the LINK multiple listing service):

**2004 - $65,000**

**2005 - $63,000**

**2006 - $130,000**

**2007 - $105,000**

**2008 - $111,000**

**2009 - $146,000** (*not counting this $300K sale*)

Although not steadily upward each year, over the 5 year period, that's a whopping 125% increase in average price for parking spaces!

Parking prices have clearly risen very fast in the Back Bay, and haven't show much sign of slowing down (*bubble, anyone?*).  We are talking about prices more than doubling in the past 5 years even with the recession.  But I find it almost an impossibility that this trend will continue over the next five years.  I really can't imagine a scenario where this spot will be worth $600K in 2015.  But who am I to say? 

If prices do continue to rise at this rate, the buyer is looking at a sizable return on investment of maybe 25% per year.  But if this turns out to be a parking space "bubble"....well....we've seen how that ends before. 

**What are your thoughts?  Comment below! **

 

 

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[View full post](https://www.charlesgate.com/blog/bid/9631/recession-what-recession-back-bay-parking-space-sells-for-300k)

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