No End In Sight To Downtown’s Luxury Condo Boom
If you are in the market for a luxury condo in downtown Boston, the longer you wait, the harder it will be to find one and the more it will cost. Demand continues to be high and inventory low, driving up prices at the top of the city’s condo market. In May and June of this year, inventory supply was at an alarmingly low 1.02 months. A three-month supply represents a balanced market.
Low inventory levels mean that desirable properties are on the market for just a few days, and often garner multiple offers. The same group of buyers that made Millennium Place the fastest selling luxury building Boston has ever seen in 2013 and 2014 are still out there, looking to move to the city. Empty nest boomers and millennial professionals continue to lead the migration back to downtown living, and they are willing to pay for the luxury amenities they now expect to have.
Take Millennium Partner’s latest venture, the ultra-luxe Millennium Tower Boston, as an example. The 60-story building is offering 442 high-end homes that went on sale last October. 80% of the units are already sold, and the building is still a year away from opening. This kind of demand means that prices keep going up. The year to date median price for downtown neighborhood properties is up 8% over 2014, while price per square foot is up more than 7%.
$1000/sq. ft. used to be the price point that indicated a luxury property as little as four years ago. Today, that number is more than $2000/sq. ft. Real estate experts predict that most of Boston’s high-end condo offerings that are now under or readying for construction will sell at or above that mark.
All across Boston, record numbers of transactions at more than $1,000/sq. ft. are being recorded this year. There have already been more of these transactions to date in 2015 than in all of 2014, and seven times more than in 2009. There have been more than 150 transactions of at least $2 million, and nearly 30 above $3 million.
Along with Back Bay, the Downtown Crossing corridor is the most expensive real estate in the city, thanks in large part to the success of and the demand for the Millennium homes. But high-end transactions are also happening in Beacon Hill and the South End as well.
Development is in full swing across the city, with several large-scale projects under construction. But experts still predict that prices will continue to climb, as developers cannot keep up with demand. As projects get approved and more high-end units become available, the luxury market may eventually find a balance. But with Boston’s economy and population both booming, and downtown living in full vogue, eventually appears to be pretty far away.