These spots give the concept of pay-to-park a whole new meaning.
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In the past week, parking spots in two major U.S. cities were bought for major cash. The IRS auctioned off two tandem spots in the Back Bay neighborhood of Boston for a whopping $560,000 together. In San Francisco, a single downtown spot was listed and sold for $82,000.
The purchases give the owners the right to park in the space at any time for however long they want. Just like buying a house or a condo, these spots are owned until sold or until the owner dies, when it becomes a part of his or her estate. Pemits are not required for any of these recently-sold spots, because they are in residential locations with restricted access.
Real estate experts say as major cities become more densely populated, parking will become even more of an epic struggle—making any available pavement space a hot commodity.
Sean Sullivan, senior sales leader at Climb Real Estate in San Francisco, sold last week’s parking spot for $82,000. He says he sold a space in the same garage for $95,000 last year, and highlights their proximity to AT&T Park as a key selling point.
“I think we will start seeking parking as a more competitive piece in the overall market,” Sullivan says. “Cities have to manage their on-street parking better.”
The price tag of the spaces in Boston started at $42,000 last week and quickly escalated to $560,000 for the tandem spots in just 15 minutes, says Elliot Levine, real estate broker at Marston Beacon Hill in Boston.
“Parking spots sell all the time, but this just happened to be a bidding war that drove up the prices,” Levine says.
He says selling parking spots is normal in Boston. “The spots that sell for $300,000 or $250,000 make the news—but they usually sell for much less.”
Many times, condos within Boston will bundle parking spaces with the property and can increase the value of a listing by $150,000 on average in an area like Back Bay, Levine says.
“Most people will think it’s valuable to keep the spots with the condo because it will add value,” he says. “It depends on where it is, but generally these are tandem spots or are in a garage.”
Sullivan is betting the high-pay-for-parking trend will continue. Since his latest sale, he has listed two more spots for $85,000 each thanks to the publicity. The real estate market has largely turned around, he says, and the prices these pieces of pavement are fetching signal a cultural shift.
“People now want to live in cities. They are buying for the long haul. They realize ‘my city house has to work for me, and I am going to be here forever.’ And for people who have the means, they are acquiring these spots to make urban homes work for them.”
Wealthy people will shell out cash in the name of convenience, and these parking sales demonstrate just that.
“People who have the means to make their lives easier and nicer will keep doing just that,” he says. “Cities will become what they were prior to WWII—glittering, dense and glamorous.”
Just as long as you can find parking.