Boston Homes
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Prices and sales climb in second quarter
the third quarter of 2016. Last year, the median per square foot reached $875 in the second quarter.

The big news here is in the Back Bay, where the average selling price per square foot climbed five percent from the second quarter of last year to a record $1,241 per square foot in the second quarter this year. The median selling price per square foot in that neighborhood was $1,188 this past quarter – up a big nine percent from a year ago.

The only part of the city with a higher price per square foot was in the Seaport, which saw its average rise 61 percent to $1,423 and the median selling price per square foot climbed 82 percent from last year to $1,427.
 
During the quarter, 35 percent of all condo sales in the city were above the asking price. That’s up 15 percent from the beginning of the year. The Back Bay is above the city number with 42 percent of all condo sales selling above the last asking price. The only time that figure has been higher in recent years in that neighborhood was in the second quarter of 2015 when 49 percent of all sales were above the last asking price.

Charlestown is also hot with 55 percent of condos selling for above the last asking price during the quarter.

“The city is in overall high demand,” said LINK President Debra Taylor Blair. “Everyone wants to live in the urban core.”

In the city’s luxury condo market that focuses on the luxury and ultra-luxury full-service buildings offering such benefits as concierge, valet parking, on-site fitness rooms, lounges and other up-scale lifestyle amenities, sales took a big leap in the second quarter, rising 254 percent to 241 units sold. Much of this was driven by the new 30-story ultra-luxury Pierce Boston building at 188 Brookline Ave. in the Fenway.

The average selling price in luxury condominium category was $2,073,522 for the quarter and the median was $1,597,000. The median selling price per square foot was down a percent this quarter to $1,326.

Blair said that the luxury market is “still looking upwards.”

The rise in mortgage interest rates this year has not hurt the demand for homes in Boston, according to Blair.

“So many companies are coming to the city,” she noted.

Boston has become a thriving global destination city and the demand for luxury condos is high.

She points out that inventory is not high enough to meet the demand of prospective homebuyers. “It’s still a negative inventory,” Blair said.

Inventory citywide hit a low of 252 units early in the first quarter, but has made its annual rise up, recently climbing to 463. The high last year was 473 heading into the third quarter.

In no neighborhood is the shortage of homes on the market more obvious than in the Back Bay. Sales there actually fell nine percent to 116 condos sold in the second quarter compared with 127 last year. That’s because of the lack of supply, not demand.

Competition for homes is high. The median sales price in the Back Bay leapt up a sizable 12 percent to $1,100,000 from $980,000 in 2017.

Condos in the Back Bay are not spending a lot of time on the market. For this past quarter, condos were selling, on average, within 50 days. This is a reflection of the great demand to live in that extremely popular neighborhood. Blair said that there have been some other “amazing neighborhood spikes” this past quarter.

The highest number of sales during the second quarter happened in the South End – another extremely popular neighborhood. 253 units went to new owners during the past three months – an increase of 33 percent. The average selling price went up 13 percent to $1,242,272 and the median rose 17 percent to $1,040,000. Home stayed on the market for an average of 35 days.

South Boston also saw 200 units with new owners during the quarter, but that is a 13 percent drop compared to the second quarter in 2017. That is also a reflection of the shortage of homes for sale. Demand for South Boston homes is still high. The average selling price had a big 11-percent jump to $759,804 and the median was up 13 percent to $698,000. 49 percent of the units sold were above the asking price.

Another key sign of the huge demand – the average days a home for sale in Southie stayed on the market was a mere 21.

South Boston set two new records in the quarter with the average price per square foot rising to $709 and the median price per square foot at $713.

Charlestown is another neighborhood in high demand. Sales soared 44 percent to 127 condos sold. The median price went up three percent to a record $731,500 and homes were on the market for an amazing average of only 28 days. Charlestown also saw a record in the average price per square foot, up three percent to $743 while the median price per square foot is now a record $745.

Charlestown hit another impressive milestone with overall quarterly sales volume rocketing up 12 percent to $98,313,042.

The market in the Seaport district heated up with 89 units sold – an increase of 242 percent compared to the second quarter last year. Blair said the new 14-story, 120-unit ultra-luxury 50 Liberty building on Fan Pier is a major factor in that. The average selling price went up 121 percent to $2,485,929 and the median was up 129 percent to $1,898,995 in that neighborhood.

The North End is a neighborhood getting more attention from buyers, especially among those wishing to buy a home for under $1 million. Sales rose 50 percent for the quarter to 24 with the average price up 34 percent to $810,958 – a new record for that neighborhood. That’s an increase of 14 percent from the first quarter this year. The rise in the median selling price to $660,000 is also a record, up six percent from a year ago. Of those sales, 71 percent were above the asking price.

Thanks to the new full service luxe Pierce Boston building in the Fenway, condo sales in that neighborhood are up 17 percent for the quarter to 75 units sold. The average price was $1,176,526 – up 65 percent from last year. The median increased to $916,100, up 50 percent from a year ago.

Other neighborhood records set during the past three months include the rise in median selling price per square foot moving up to $1,023 in the Waterfront district.

In the always-popular South End, there was a record in sales volume to an impressive $314,294,881. That’s up 35 percent from the volume of $232,347,746 set in the second quarter of 2016. The price per square foot also hit new highs with the average reaching $1,072 (up 7 percent from the 2017 second quarter) and the median now standing at $1,085 (up 10 percent). 42 percent of the sales were above the last asking price. The median selling price in the South End went up 17 percent from a year ago to $1,040,000.

Looking ahead to early next year – The Four Seasons Private Residences at One Dalton will be ready for residents. This ultra-luxury tower, currently under construction in the Back Bay, will provide the city with its newest ultra-luxury residential palace. Blair believes its effect on sales next year could be even larger than Millennium Tower was when it opened in 2016.

One factor that could drive up prices of new construction homes across the city is tariffs. The Trump administration’s 25 percent tariff on steel imports and 10 percent tariff on aluminum imports are making it more expensive to build.