Condominium sales in downtown Boston took a nosedive during the first quarter of the year, but prices continued to escalate.
A total of 438 condos were sold in downtown Boston during the first three months of the year, an 18 percent drop from the same months in 2006, according to statistics from The Warren Group, parent company of Banker & Tradesman. Downtown neighborhoods include Back Bay, Beacon Hill, the South End, the North End and Midtown. While sales tumbled in downtown Boston, the median condo price jumped 12 percent to $545,300.
Citywide, the condo market remained relatively flat. The median selling price for condos sold in all Boston neighborhoods eased about 2 percent to $348,000 during the first quarter. Besides the downtown, prices climbed in five other Boston neighborhoods including Brighton, Jamaica Plain and Charlestown. But median condo prices slipped in seven Boston neighborhoods, including Allston, Dorchester and Roxbury.
‘The Best Condition’
Still, some Boston brokers insist that sellers are on better footing this year because the number of for-sale condos has fallen dramatically in most parts of the city.
Dave Stenberg, who manages four Boston offices for Hammond Residential GMAC, said the inventory in Back Bay, Beacon Hill and the South End hit a peak last May. “Since then it has been decreasing,” he said.
There were 2,537 condos available for sale citywide as of last Tuesday, down from 3,277 condos on the market during the same date in 2006, according to information from MLS Property Information Network.
In Back Bay, Beacon Hill and the South End, the drop in inventory was just as stark. There were 576 condos on sale in those neighborhoods as of May 6, down from 820 during the same period in 2006, according to LINK, a multiple listing service primarily used by downtown brokers.
“Last year, we were in what a lot of people were calling a buyer’s market, and I would say this was true of last year. Buyers had more leverage,” Stenberg added. “Today, I would say the sellers have more leverage.”
Despite the drop in the number of for-sale condos, local brokers are advising sellers to be careful not to over-price their homes. “This isn’t a market where you can test the market,” said Bob Imperato of Boston Realty Assoc.
Condo sales across Boston were flat in the first quarter. A total of 1,369 condos were sold citywide during the first quarter, a 2 percent increase from a year earlier, according to The Warren Group’s data. Some neighborhoods, including Brighton and Roxbury, saw sales gains of more than 30 percent during the first quarter.
In Brighton, broker Matt Bless has noticed that the expectations of sellers and buyers are more in line. Bless, owner of Vanguard Realty in Brighton, said many sellers last year weren’t eager to compromise on price.
“We are definitely seeing a lot more back-and-forth between buyers and sellers in terms of negotiating,” Bless said. “There’s an expectation of more significant compromise from sellers on price and terms. I think sellers have reached a point where they’re aware of this and they expect it so it’s a little easier to put these transactions together than a few months ago when sellers hadn’t fully absorbed the reality of the market we’re in.”
Condo sales in Brighton jumped 43 percent during the first quarter, when 133 units were sold compared to 93 a year ago. The median selling price for a condo also surged 26 percent to $410,500 during that period.
Bless said condo sales may have risen because of new condo projects in the neighborhood, but added that speculation in the condo market has dropped off.
“[Speculation] was rampant a couple of years ago because the profit expectation was significant and realistic, but the profit expectation is much more difficult to pin down now,” he said.
In addition to Brighton, neighborhoods in Boston that saw double-digit percentage increases in sales were Dorchester, Roxbury and Jamaica Plain. In Dorchester, unit sales spiked 38 percent, while Roxbury’s sales shot up 32 percent. In Jamaica Plain, there was a 15 percent increase in sales. Median prices in Dorchester and Roxbury, however, declined 7 percent.
Julie Simmons, who manages Jack Conway & Co.’s Dorchester office, attributed the increase in sales in Dorchester to the fact that many buyers find the neighborhood more affordable than other Hub neighborhoods like Jamaica Plain, the South End and South Boston. Dorchester’s median condo price was $270,000 during the first quarter, while the median condo price in Jamaica Plain was $330,000, and in South Boston, $345,000.
Simmons said she also believes buyers are being drawn to newly built condos in Dorchester that feature high-end amenities like media rooms, roof decks with showers, and master bedroom suites.
“They’re amenities you would see at downtown condos. When you get these amenities at Dorchester prices, people are starting to look at us [who] never did [before],” she noted. “It’s not your grandmother’s Dorchester.”
And even though the median selling price declined in Dorchester in the first quarter, she said, she’s actually been surprised by the number of condos priced over $350,000 that have sold in recent months. Simmons added that she believes the prices are tied to the upscale amenities that are being included in new units.
Stenberg, of Hammond Residential, predicted that prices will be relatively flat this year. But he also cautioned buyers shouldn’t wait long to make a decision. Stenberg said the longer buyers wait the less leverage they’ll ultimately have, especially since the inventory has declined.
“If they’re waiting for a bell to go at the bottom of the market – first of all, there is no bell, and I don’t see any type of drastic decline [occurring],” he said.
For sellers, pricing and condition of property are always important, but they’re particularly critical in the current market in which buyers are taking longer to make a decision, said Jon Goode, senior vice president with Coldwell Banker Residential Brokerage.
“When you’re competing with so many different properties, you’ve got to be in the best condition,” said Goode. “You’re also competing with brand-new buildings. When you’re selling an un-renovated brownstone and comparing it to a snazzy new loft, you’ve really got to shine it up.”
