Affordability hurdles: More Mass. homebuyers co-buying property to break into real estate market

BOSTON — It is well known that it’s expensive to live around here.

According to Zillow, housing costs take about half of the typical homebuyer’s income in the Boston area.

That’s too big a hill for most people to climb alone.

Now, an increasing number of buyers are taking a different approach. They’re co-buying a home with a friend or sibling as a way to break into this costly real estate market.

“Buyers are navigating affordability hurdles, they’re getting creative,” explained Orphe Divounguy, Ph.D., a senior economist with Zillow. “People are co-buying because it helps to put down a bigger down payment, it makes mortgage approval a little bit easier.”

He says 26% of buyers bought with a friend or relative last year. That’s a 10% jump in just one year.

Megan Ritter, an Associate at Griffin Law LLC of Boston and Nantucket which specializes in real estate, business law, and litigation, added “Young professionals, even middle-aged people, are coming together so that they can share the burden, be on the mortgage together, but also share the benefits of co-owning property.”

Co-buying property is pretty easy to do, especially as it becomes more popular and moves into the mainstream.

It’s important, however, to make sure it’s set up the right way.

“You have to start with asking what are your goals for the property,” explained Ritter. “Is your goal just to get in the market, live here for a couple of years and both pull out and get your money and do your own

thing? Or is it something you’re holding onto long term to have renters in there?”

Either way, you will need legally binding documents.

“Something like a cohabitation agreement is important just to set out rights and responsibilities with regards to the property,” Ritter said.

She adds it’s no harder to get a mortgage as a co-buyer but stresses a bank will want to get paid no matter what happens in the relationship down the line.

“If your partner ends up not paying their end of the bargain, you risk the rest. You risk foreclosure and impacts to your credit score if the full amount of the monthly payment isn’t made each month.”

Boston 25 News went to Jamaica Plain to find out what residents think of this concept.

The median listing there is now $870,000 which reflects an 18% increase over the last year, according to www.realtor.com.

A woman walking her dog said “Otherwise, I feel it would be pretty hard to get in the market unless you’re married or in a traditional living situation. By yourself, you wouldn’t be able to do it.”

Another woman said “I think it’s a good idea. I’m all for it. I think more people are doing that, waiting to get married anyways, so it makes sense to me.”

Divounguy said more than half the homes in this are area are selling above list price, making affordability issues even worse for the majority of buyers.”

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