The Cutter Report – Boston Real Estate Trends: May Update

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Posted May 28, 2014 by Patrick Cutter in Business
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It’s May 2014 and this is the Cutter Report. We begin the second quarter of the year with no signs that the white-hot Boston condo market is going to slow down anytime soon. Taking a look at condo sales throughout Boston proper so far this year, the median gross price is at a staggering $634,500, an all-time high for this market.

 

8808_MPCutterReportMay_Boston-Overall-Median-Gross-Price

 

Boston Proper Median Gross Price

This strong showing is primarily driven by closings at the ultra-successful Millennium Place, where first quarter closings to complete the sellout of the luxury building significantly influenced average and median prices. With Millennium Place out of play, transactions are likely to decrease in the overall Boston condo market as inventory continues to be low. There is less than a two months’ supply, and there are no projects with greater than 50 units slated to open this year.

Millennium Place buyers weren’t the only of the developers’ customers making an impact in the marketplace. Buyers who bought at Millennium’s Ritz Carlton Hotel and Towers across the street at Washington and Avery are now reaping the benefit of getting in on the ground floor of a Millennium project.

 

8808_MPCutterReportMay_Ritz-Median-Gross-PriceRitz Median Gross Price

2013 was a record year at the property, with a median gross price of $1.75 million at year end. That record will be shattered at the current 2014 pace. Three sales in April (including one for $4.35 million) and seven total for the year have all fetched in excess of $1000/sq. ft.  The average price per foot jumped 27% from 2009 to 2013, and is already up another 14% so far this year.

This sharp uptick at the Ritz Towers is indicative of the greater trend in the Downtown condo market, where average prices per square foot are up 7% to $964/sq. ft. Downtown has outpaced Back Bay in 2014 with higher average and median gross condo prices, making it the hottest high end luxury condo destination in the city this year.

 

8808_MPCutterReportMay_Downtown-Market-Average-Price-Sq-FtDowntown Market Average Price Per Square Foot

Looking at the year-to-date increase in the price per square foot average of the Ritz Towers and Downtown condos against that of overall Boston Proper condo market, we see the performance of the overall market is very similar to that of the Downtown market, up about 7% each. It’s the Ritz that has truly outperformed the market by double, with a 14% jump over 2013.

 

 

 

 

8808_MPCutterReportMay_Average-Price-Sq-FtAverage Price Per Square Foot

No matter the metric considered, so far in 2014, they all point the same way – up. Those planning to get into the ultra-popular Downtown condo market this year will find properties to be scarce and at a premium, at least until Millennium Tower Boston units come available to the public in October. Even though these ultra luxury units will be premium priced, I don’t expect them to be around long either.


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