The Cutter Report – Boston Real Estate Trends: June Update

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Posted June 26, 2014 by Patrick Cutter in Business
June Cutter Report

It’s June 2014 and this is the Cutter Report. We are halfway through the year, and it continues to be a banner one for the overall Boston condo market.  The number of total transactions is now lagging behind the 2013 pace, but owners aren’t complaining as prices continue to set market records. Average price per sq.ft. is $720 YTD,, a pace that would be a 7% increase over last year if it holds, and up 30% over the past 5 years. Inventory remains at just a 2-month supply, and even tighter in the luxury condo market. With only 628 new units coming up for sale this year (442 of those at Millennium Tower Boston), that scarcity isn’t going to improve.

Boston Proper Average Price Per Square Foot

Boston Proper Overall Average Price Per Square Foot

Sales in the Full Service Luxury Condo sector continue to drive this record pace. At Millennium Place, a building that opened just 8 months ago, a unit sold in May for $2 million, 22% more than the original purchase price of $1.64 million. Other contributors include the record average per square foot price fetched for a unit in the Four Seasons, which sold last month for $2908 per foot.  The average asking price in this sector in May was $1481 per sq. ft., so we expect to see the YTD average continuing to climb.

Luxury Average Price Per Square Foot

 

 

 

 

Full Service Luxury Average Price Per Square Foot

One telling testament to the upward march of sales prices is the fact that 25% of all sales in the Boston condo market are now for more than $1 million.  This was true for only 19% of transactions in this sector in 2013.

8917_MPCutterReportJune_-Boston1MillPlus_Percentage-Sales

 

 

 

 

 

 

 

 

Percentage of Condo Sales $1 Million Plus

It follows that this is also a record pace for this measure. There were 64 $1 million dollar or more condo sales last month.

Geographically, the Downtown area leads the way in terms of high sales prices. For example, Downtown has seen 59 units sell for more than $1000 per sq. ft. so far in 2014. Back Bay is next closest, with just 49. Gross prices Downtown regularly exceed $1 million, with 105 such transactions YTD. This results in the average gross price trend shown here, up 15% from 2013.

 8917_MPCutterReportJune_Downtown_Average-Price

 

Downtown Market Average Gross Price 

No Downtown building embodies these record-setting trends more so than the Ritz Carlton Towers at Washington and Avery Streets. In this seller’s dream of a building, the average price per square foot is up 11% over a record setting 2013.  Since 2009, the increase is a staggering 41%.

 

 

 

 

Ritz Carlton Towers Average Gross Price 

The trends illustrated by these numbers are irrefutable – people want to live Downtown, and they are willing to pay ultra premium prices to do so. Millennium Tower Boston is the only building due this year with more than 50 units, so expect the inventory there to be depleted very rapidly. With no other significant inventory coming online, choices will be scarce, meaning prices will continue to climb upwards. For sellers in this market, summer is looking very hot indeed.


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