Downtown Boston Condominium market condition through Q3 2011

Entering the fourth quarter 2011 is shaping up as the second best year for real estate in Downtown Boston in the past decade, trailing only the record year 2008*.  YTD transactions, sales volume, average and median selling prices are all ahead of 2010, which was a very solid year on its own.  It would be reasonable to expect new construction to pull values up as they did in 2008 but 2011 is different.

Upward pressure on pricing is evident in the market and is coming from demand for re-sale homes.  This is confirmed in the data when we compared YTD 2011 to YTD 2008.  YTD 2008 new construction sales accounted for 18.5% of the total sales volume in Downtown Boston, those sales were concentrated in Battery Wharf, The Mandarin Oriental, and The InterContinental.  YTD 2011 just 7.5% of the sales volume is in new construction buildings; The W, Battery Wharf, The Clarendon, and 45 Province, yet average and median selling prices continue to experience upward pressure.  The fact that Downtown Boston has held value through the financial crisis, great recession is a substantiation of the contrarian nature of the market relative to the National real estate environment.

*2008 Record Data Points:

1. Highest Average Selling Price
2. Highest Median Selling Price
3. Most Sales over $1,000 per square foot
4. Most Sales over $1,000,000
5. Most Sales over $2,000,000
6. Most Sales over $3,000,000
7. $1,000,000 Sales as a percentage of sales volume

Steady as she goes when it comes to value….

Over the past decade there have been numerous macro-negative economic events which have affected the U.S. and global economy.  The most recent events are the contentious debate and ultimate increase in the U.S. Government debt ceiling and the subsequent downgrading of U.S. Government rating, from the highest investment grade AAA to AA+, by ratings agency Standard & Poors.  In the wake of these events we thought it important to overlay the trend in condominium values in Downtown Boston.

Through the past decade, the condominium values in Downtown Boston have held a consistent upward trend line, as noted in the chart at the top of the page. Through numerous macro-negative economic events, prices have increased in both the average and the median.  Current market conditions; low inventory, low mortgage rates, high rental occupancy, multiple buyer profiles, as well as a strong local economy have helped to underpin values with the strong probability of upward pressure on prices on the horizon.