Downtown Boston Condo Prices Approach $1 Million Average

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Posted May 21, 2014 by Lindsey Daniels in Business
Downtown Boston Skyline

If you’re hoping to get a premium condo in downtown Boston, you better have at least $1 mil to drop on that unit. LINK and The Boston Globe recently reported that the average price of a downtown condo is $950,000 — and that’s if you can find a unit to purchase. Luxury condo developments like Millennium Place and 45 Province are commanding top dollar and even selling out of inventory.

The Growth in Demand for Downtown Property

Recently, VODB’s Cutter Report highlighted some of the numbers behind this growth. Between 2009 and 2013, condo unit sales increased by 44 percent. Meanwhile, the average unit price per square foot increased by 21 percent. These new figures represent record highs for Boston, illustrating that the heart of the Hub is quickly becoming a more desired zip code. Millennium Place, the new luxury unit development from Millennium Partners, recently sold out of inventory completely. Demand is growing for the full service luxury market, which only represented 5 percent of the market share in 2009. Now, that’s more than doubled and is attracting wealthy folks who want Manhattan experiences and amenities in a downtown Boston location.

Lack of Real Estate Leading the Price Surge

One major part of the growth in demand is the stunning lack of inventory for condo units and single family homes. The available condo units are down 27 percent in January 2014 compared with the same time one year before. Most of the units that have come available in downtown Boston this year — and neighboring Back Bay and the South End — have already sold. While developers like Millennium Partners are building new units (Millennium Tower Boston is due in January 2016), right now there are not that many market-ready units.

The Boston Globe further reports that the stunning growth in condo prices isn’t limited to Boston alone. Statewide, average condo sales prices rose to over $300,000 in January, 2014, a 24 percent increase from condo sales prices in January 2013. Meanwhile, people all over the Bay State are looking for an affordable, attractive and well-situated home. When coming up short on inventory, they must either look for homes further afield or find more money to finance their purchase. It’s a seller’s market, which means higher than anticipated real estate prices to simply get in on the ground floor of a new development.

What $1 Mil Means for Boston

$1 million is certainly a harbinger of change for Boston. Not too long ago, downtown Boston had a mixed reputation and pretty much no one lived or went there after work hours. Suddenly, downtown is in the middle of an exciting reinvention and fast becoming a playground for the affluent.

While this shift is bringing a lot of good things to downtown Boston, it is certainly poised to change the area’s look and feel forever. Developers are already starting to compare downtown Boston to Manhattan, as each are increasingly becoming locations that command a premium to live in. With Boston expected to continue down the path it is presently on, condo prices will continue to skyrocket and the environment will continue to evolve quite rapidly.


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