With UCLA professor Donald Shoup continuing to garner further exposure for his ideas around the perils of free parking and what it costs residents of cities across the US, the merits of parking spot ownership also continue to gather steam.

In a recent NY Times article, Shoup states that 99% of automobile trips end in a free parking space.  The law of averages is no doubt in play here, as Boston has little to no free parking if you consider neighborhood resident parking areas “paid” parking.  The South End neighborhood is a good example of Boston’s lack of free parking spaces, where perhaps the only free parking available is on Columbus Avenue in between Massachusetts Avenue and Dartmouth Street.  Residents and visitors alike in this area circle Columbus Avenue like hawks pouching on available spots, only to many times leave cars sitting until they must be moved several days later for street sweeping.

Beacon Hill, similar in nature, is made up almost entirely of resident parking spaces, and the significant demand, outstripping supply by leaps and bounds, has continued to push up average resale parking space prices at the exclusive Brimmer Street Garage to approximately $250,000 per space.

The heart of this topic is the concept that the availability of free parking spaces propagates the use and possession of cars, driving, congestion, and pollution. Shoup suggests that a free parking space is in essence a subsidy.  The trend towards decreasing congestion and cars in city centers, and increasing the use of public transportation, is not new.  London serves as a great example of a city that has taken significant and proactive steps to curb automobile use in its city center through the use of economic means, a traffic congestion charge.

These trends place increasing amounts of wood behind the arrow of Boston parking spot ownership.  An increasing number of investors and analysts are digging deeper into the concept of leveraging Boston parking spaces as investment vehicles by assembling a portfolio of income producing parking spots.  Boston has been ahead of the curve in this realm, and should the trends evangelized by Shoup continue to gain steam, the economics of supply and demand will move even further in favor of owning a parking space in downtown Boston.

The 2009 downtown Boston parking space sales numbers have been compiled, and year over year, while volume was down, average and median sales prices have remained stable.

According to LINK (one of two Boston MLS systems), the number of parking spaces that sold in downtown Boston during 2009 was 65, down from a 2008 volume of 97. Average sales price fell slightly to approximately $94,000, and median sales price rose slightly to $67,000.

2009 Boston Parking Space Sales Statistics:
Number Sold: 65
Average: $94,420
Median: $67,000
Average DOM: 132 days

2008 Boston Parking Space Sales Statistics:
Number Sold: 97
Average: $99,641
Median: $65,000
Average DOM: 136 days

The economics (i.e. supply and demand) behind parking spaces in the heart of the city continue to bolster the appeal and stature of owning a space outright, for those who simply need a place to park a vehicle either inside or out, or those looking to build a stable and diversified investment portfolio.

2010 is off to a quick start, with the latest Boston parking spot sale taking place at the Ritz Carlton (2 Avery Street) in Boston’s Midtown neighborhood – the space in the self-park secured Ritz Carlton garage sold for $88,000.

For more information on deeded parking spaces in Boston, see our comprehensive page of Boston parking space listings.

While supply and demand is the economic concept that resonates with most people, drilling further into that cornerstone of economics and looking at  economic scarcity, when availability is not enough to meet demand, is becoming more poignant in light of Wall Street’s meltdown, as well as the lack of melting snow. The investment merits of garage parking spaces to diversify and stabilize your asset pool, and prevent a complete time sync of shoveling your car out of a giant snow pile, is on the rise in Boston and across the country.

A cornerstone of finance is the concept of diversification, and with the S&P 500 down almost 40% in 2008, consumers and investors are on the lookout for assets that will simply hold their value, let alone appreciate.  Garage parking spaces have have become more attractive in the current financial market, and provide the diversification and potential future appreciation for several reasons.

Too many, or too few, parking spaces in Boston?

Looking at supply and demand, at the condo development level, it’s important to note that not all condo developments have parking garages (take Broadluxe for instance) and many condo developments have more condominiums than parking spaces in their garages (take Strada 234 for instance).  At the rowhouse level, say, in the South End, you typically see two outdoor parking spaces assigned to each address, but sometimes none, that being a function of rowhouses at one time serving as single family townhomes, and the availability of street parking (for residents) in some neighborhoods. That said, excluding the transient influx of parking demand for city employees and college students, parking spaces, especially garage parking spaces, are a scarce resource in Boston.

Do Boston Parking Spots Appreciate in Value?

Back in 2004, the Boston Globe put together an article (see Value soars on choice Hub parking spots) about parking spots at the Beacon Hill Brimmer Street Garage that were fetching $160,000, which at the time was quite monumental.  In 2008, parking spaces at the Brimmer Street Garage were selling for $250,000.  From 2006 highs, both median and average prices for deeded parking spots in Boston are again on the rise.  With the volatility in the financial markets, appreciation appears to be somewhat of a (bonus) afterthought notes a recent Wall Street Journal article (see When Stocks Tank..) that highlights consumers abandoning stocks and bonds and seeking refuge in unusual alternatives, including, parking spaces.

And then there’s the convenience factor.  Regardless of whether you have direct access garage parking in your building, or if you have to walk outside to get to a garage parking space, finding your car cozy and warm with no snow, and no snow plow drifts, on your car is a nice feeling.

How to pick a garage parking spot?

Even within a parking garage itself, there are several factors that contribute to a parking spot’s value, namely, is it a corner or end spot, which increases the number of resale Buyers who would purchase the spot, especially those with high end automobiles.  Additionally, security, heat, level / floor (specific to multi-level garages), and proximity to an elevator all factor into the value. Finally, consider the popularity of the condo development (if applicable) associated with the garage, a popular location and building only increases the value of an investment in a parking space, versus making a purchase in a building not yet completely sold out or rented.

With the start of a new year, we now have visibility into summary statistics for deeded parking spaces that sold in downtown* Boston during 2008.  Both average and median sales prices for Boston parking spots increased in 2008 over 2007 numbers.

2008
Number Sold: 93
Average: $80,459
Median: $65,000
Average DOM: 112 days

Approximately 20 $100,000+ parking spot sales in the Back Bay, Beacon Hill, South End, North End, and Waterfront bolstered sales figures in 2008.

2007
Number Sold: 117
Average: $71,865
Median: $40,000
Average DOM: 73 days

2006
Number Sold: 53
Average: $93,225
Median: $75,000
Average DOM: 202 days

*Downtown Boston includes the following neighborhoods: Back Bay, Beacon Hill, Chinatown, Fenway, Financial District, Leather, Midtown, North End, Seaport, South Boston, South End, Theatre District, Waterfront, West End.

Back in mid June (see Boston Real Estate Under $100K), we briefly covered an available garage parking spot at 44 Prince Street, a relatively new higher-end condo development in the heart of the North End, that was listed for sale at $100,000.  Our friends at Universal Hub even caught wind of it and were entertained, to say the least.

After being on the market for 17 days, the parking space went Under Agreement, and the piece of property closed on September 2, 2008, for…$100,000 – perhaps setting a new record for North End parking spaces.

There are occasions when the current inventory on the market (be that a condo or a parking space) has been reviewed, and nothing is exactly “right”, and that is when, in the past, we have reached out to our significant reader base to inquire if there is something out there that is not yet on the market, but the current owner would be interested in selling.

Currently, we have clients who are seeking a garage parking space for a high-end automobile. The available parking spaces across the city come up short in some aspect.  What we are looking for is the following:

• Garage parking
• Non valet service (i.e. owner must park their own car)
• A corner spot or a situation that significantly limits the exposure the automobile would have to surrounding vehicles
• Low HOA fee
• Garage must be located in Boston proper

Should you, or someone you know, have a parking space that specifically meets the above-mentioned criteria, and would be interested in pursuing an expedited cash sale, please reach out to us using the contact us link at the top of this page – we will get back to you promptly with more information and a request for photos of the parking space.

A handful of deeded parking spots have come available for sale over the past week, including two spots in the South End, one at Wilkes Passage and another at Gateway Terrace. Additionally, rare parking spaces have come available at Tremont on the Common, complementing the existing (rather small) inventory of deeded spaces in downtown Boston – for more details, see our Boston parking spaces page for information on currently available spaces or to contact us to list your existing space for sale.

A surprise that Bostonians face when purchasing a parking space in the city is that there are oftentimes monthly fees associated with a spot – an HOA condo fee if you will. In addition to monthly fees, property taxes are sometimes due on a parking space as well (somewhat of a nominal yearly sum, but a sum nonetheless). Can you not simply own something free and clear? What’s the purpose in “owning” something if you have to pay a monthly “rent”?

Oftentimes, the monthly fees for a downtown Boston parking space are understandable, perhaps it’s an all valet garage, or there is a significant level of security in the building that you are paying for. Parking spots off of Commonwealth Avenue in alleys have snow removal services for instance. However, every now and then parking spaces come available that involve no fees whatsoever, an opportunity to own a piece of Boston free and clear.

That is the opportunity that is available at the Midtown Ritz Carlton towers, where two self-park garage parking spaces, with no monthly fees or real estate taxes, are currently available. See our Boston parking spaces page for more information on these two parking spaces, and all other  spots available downtown.

Over the past 12 months, there have been two Boston parking spaces for sale at 425 Newbury Street, otherwise known as the Somerset Garage. In late April, spot 171 went Under Agreement (it had a list price of $59,500 and an HOA fee of $63), and in late September of 2007, spot 190 sold for $63,000 (it had an original list price of $75,000 and an HOA fee of $69).

We currently have a Buyer who is interested in purchasing a parking spot at the Somerset Garage. If you, or someone you know, is considering the sale of a spot at the Somerset, please contact us.

If you are in search of a Midtown parking spot, or are a resident of the Ritz Carlton towers, you may be interested to know that two deeded garage parking spaces have recently come available. For more information about these two new spots, see our Boston parking spaces page.

For an up to date view of available condos for sale in the Ritz Carlton Boston, contact us using the link at the top of this page.

Also recently available is a garage parking space at 168 Camden Street in the South End / Roxbury area for $29,000, located adjacent to Carter Park.