A number of downtown Boston’s newest luxury properties, including the Residences at InterContinental at 500 Atlantic Ave., are enjoying strong sales.
Sales of ultra-luxury condominiums in downtown Boston are soaring.
A total of 81 condos with price tags of $2 million or more were sold through October, 37 percent higher than the same period in 2006. Sales are even more brisk than the same months in 2005, when the Bay State housing market hit its peak, according to statistics from The Warren Group, parent company of Banker & Tradesman.
Pumping up sales are some of the city’s newest luxury properties, including the Residences at InterContinental at 500 Atlantic Ave. Fifteen of the 81 $2 million-plus units that have been sold, nearly 19 percent, are part of that 130-unit waterfront development.
Local brokers say demand from suburban empty nesters and foreign investors is keeping sales strong.
“Boston is a city that still has a great deal of international appeal. With the falling dollar, one of the benefits of it can be the luxury residential market,” said Mark Lippolt, executive vice president of Coldwell Banker Residential Brokerage New England.
Notable sales include a 14-room condo at 25 Commonwealth Ave. in the Back Bay area that fetched more than $8.22 million in March, and a four-bedroom unit at 171 Commonwealth Ave. that traded for $7.12 million in June.
While sales jumped, properties in that price range took about a month longer to sell.
Units sold during the first 10 months of 2007 took an average of 189 days to sell – a little over six months – compared to a 153-day average a year earlier, according to MLS Property Information Network.
Still, Realtors say buyers have found Boston’s full-service buildings that feature doormen, parking and other sought-after amenities enticing.
“This is what people really want,” said Beth Dickerson, who has over 18 years of experience selling real estate in Boston’s tony neighborhoods.
Because of the competition from newer upscale condos that boast such amenities, some sellers of older units are slashing prices by as much as 10 percent to move their properties.
A three-bedroom, three-bath condo at 65 Commonwealth Ave. that was originally listed for $2.8 million at the beginning of 2006 and re-listed at $2.49 million in July eventually sold for $2.14 million.
Dickerson, an agent with Gibson Sotheby’s International Realty, said the condo lacked central air conditioning and parking, a tough sell when newly built luxury units featuring both are available.
“It’s a very tough time for people who are trying to compete with these new projects,” said Dickerson.
Another unit at 67 Mount Vernon St. on Beacon Hill sold for $2.02 million – 18 percent lower than the $2.47 million asking price – after seven months on the market.
But Dickerson said drastic price cuts and special incentives haven’t been widespread.
International Demand
Jeffrey Heighton, who manages the Back Bay and Beacon Hill offices of Coldwell Banker Residential Brokerage, said Boston’s high-end market has been helped by a pickup in sales activity in affluent communities like Brookline, Newton, Wellesley and Weston.
Home sales are trending higher in those four communities compared to a year ago, giving an extra push for buyers in those towns considering a downtown move.
And even though prices have declined in many markets, Heighton said many people searching for multimillion-dollar condos have a lot of built-up home equity. “They can afford to take 5 [percent] to 10 percent less [on their home] if they feel they can get a good opportunity downtown,” he said.
Another booster for 2007 sales was the big bonuses financial services and Wall Street firms doled out last year. “We saw an immediate impact in Boston,” from those bonuses, said Heighton.
Heighton said brokers are closely watching foreign investment in the city. Economies in some western European countries are booming and the weakening U.S. dollar is encouraging foreign investors. “We’re seeing a lot of South American and Irish money,” said Heighton.
Some foreign purchasers are also drawn to full-service luxury properties, which aren’t common in Europe. “Clearly, there’s been a demand from the international buyers for full-service living,” said Heighton.
It’s not just foreign investors and empty nesters who are seeking Boston condos. Dickerson said she has sold to families who have combined multiple condos for more living space.
“People that were typically looking at only single-family homes to raise their children are now looking at combination units,” she said.
Dickerson and other industry watchers anticipate sales of super-luxury condos will be even higher next year when units under agreement at the Mandarin Oriental property and other projects actually close. The Mandarin Oriental, a 13-story mixed-used building featuring a 5-star hotel and 50 condos with prices starting at $3 million, is set to open next year. Realtors say units at that property have pre-sold by word of mouth.
Other lavish properties in the works are The Clarendon, a mix of 350 apartments and condos at the corner of Clarendon and Stuart streets, and 45 Province, a 32-story tower with 138 condos in Downtown Crossing that will open in 2009.
“I think you’ll continue see the number of luxury sales climb year over year, and demand will drive how many more of these projects will continue to be built,” Heighton said.
