Downtown condo sales rebound
February 3rd, 2007 - Category: Condo, Real EstateDowntown Boston’s condominium market staged a year-end rebound, resulting in a modest 3.4 percent decline in condo prices for all of 2006.
The median price for the 3,494 condos sold in 2006 was $449,000, according to Listing Information Network, or Link. Sales fell 9.8 percent for the year, making it the slowest year downtown since 2003.
The gains in sales and prices during the three months ending in December — prices were up 2.8 percent compared to the prior-year period — spurred optimism among agents and market analysts for a turnaround this year.
“It looks like we really hit bottom in the third quarter, and we’re at the start of a slow climb out,” said Link’s president, Debra Taylor Blair. She said interest rates and the supply of condos for sale have remained low, supporting prices.
But while “it’s a recovery,” she added, “it’s not going to spring back overnight.”
The sales spike may prove only temporary, possibly due to a warm fall and winter. Spring sales will be key to determining the Boston market’s direction. But while downtown sales struggled for much of last year, it nevertheless was a stark contrast to the suburban market for single-family homes. There, sales volume last year reached its lowest point in a decade, driving the median price down 5.4 percent in December, to $335,000.
The suburban downturn is dampening sales in the city because empty-nesters who may want to move into the city are waiting until the suburban market turns around to sell the family home, agents said.
As these buyers retreat, they will also affect downtown residential construction, said Jon Gollinger, president of the Collaborative Cos., a Boston real estate marketing and firm. “It’s got to, and it has,” he said.
But Gollinger said prices remain relatively firm downtown because the inventory of condos has shrunk this year. Rising costs for building have also curbed development after a period of unprecedented residential construction and has limited housing supply just as demand was also falling, he said.
A strong fourth quarter was “an indication that the marketplace is starting to find some traction,” he said. “The jury is out. We’ll have a better idea after the first quarter.”
Matt Winterle, the 25-year-old cofounder of Boston Condo Group LLC, which posts units for prospective buyers on bostoncondogroup.com, said his friends’ parents in some cases are deciding to sink money into a downtown condo, even though they haven’t sold their house.
Winterle, who is also a real estate agent, said clients who are young professionals are also suddenly buying because rents increased downtown at the same time that condo prices dropped. “They’re just fed up with rentals,” he said. “I see a lot of first-time home buyers.”
The biggest jump in sales occurred in Boston’s waterfront neighborhood , up 73 percent to 289 units. That was driven by sales at the Residences at the Intercontinental, a large, luxury project with condo prices from $725,000 to $6.8 million for a sprawling penthouse unit overlooking Boston Harbor.
Less pricey, alternative neighborhoods were also “bright spots” last year, including Midtown, the Leather District near South Station, and the North End, Link’s Blair said.
About a 2007 recovery, she said, “I think it’s started.”
Source; www.boston.com
