Boston’s Downtown Condo Market is booming this year. The overall median price for Boston rose by 10.2 percent to $487,000 this year, while luxury building prices rose 13.1 percent to a median of $735,000. Both of these metrics are only about $15,000 shy of 2008 peak prices just before the financial crisis frightened buyers.
Although these numbers seem good, citywide home sales in Boston have declined by 10% since last year. The increase in both medians is likely due to the 26.8 percent increase in high-priced luxury condominium sales, most of which are in the downtown Boston area. Another major factor allowing prices to increase while sales decrease is that there is simply less supply, giving sellers more power in the market. Debra Taylor Blair, president of the Listing Information Network, a Boston company that tracks the city’s downtown condo market, presented the idea that “Sellers can rent their properties out and more than cover their mortgage.” This at least partially explains home-owners’ reluctance to sell, and points to positive trends in market confidence despite the sales decrease.
John Ranco, a broker with the South End’s Hammond Residential Real Estate, also pointed out that much of last year’s sales were driven by federal home buyer tax credit. These incentives mainly affect first-time home buyers, and therefore lower-priced sales. Again, this helps explain 2011’s lower sales quantities but higher prices.
To read more about Boston’s booming real estate prices, visit Boston.com’s article at http://articles.boston.com/2011-07-26/business/29817026_1_condo-market-condo-prices-debra-taylor-blair.