South End condominium prices rise Sept – Oct 2009 vs. Sept – Oct 2008

Condo-seekers in the South End neighborhood of Boston got no relief, this year, when it came to buying homes.

According to an analysis of sales data for the months of September and October, average sales price, median sales price, and price-per-square foot all rose between 2008 and 2009.

Meanwhile, the volume of condo sales remained almost exactly constant, with 48 closings during the two months in 2008 and 49 closings in 2009.

Included in this analysis were only condominium resales data, meaning sales of existing condos, not sales of condos in new developments or condos being put on the market for the first time since renovation.

2008
Number of resales: 48
Average sales price: $619,500
Median sales price: $520,000
Average days on market: 64
Average $ per square foot: $611.84

2009
Number of resales: 49
Average sales price: $793,371
Median sales price: $591,000
Average days on market: 81
Average $ per square foot: $628.40

Average days on market increased by 17 days or approximately half a month. The patience of sellers apparently paid off.

The big differences in 2009 were the average size of condos sold and the number of +$1 million units sold.

In 2008, the average size of a condo sold was 1,013 square feet; in 2009, the average size of a condo sold was 1,263 square feet. (Back of the napkin calculations would prove this out – the extra 250 square feet @ $600 per square foot equals $180,000.)

In 2008, there were three condos selling for more than $1 million ($1.1, $1.31, $1.6 million) while nine condos sold for greater than $1 million in 2009, including a $3.725 million sale at 485 Harrison.

But, even without that high-end sale (outlier?), prices still rose:

2009 (adjusted)
Number of resales: 48
Average sales price: $732,295
Median sales price: $591,000 (same because I used sale #24 in both)
Average $ per square foot: $613.66

Average $ per square drops down to almost the same in 2009 as it was in 2008.

My thoughts: Condo sales closing in September and October 2008 were probably put under agreement prior to the collapse of Lehman Brothers, last fall. After that, the condo sales market, and the entire economy, fell into disarray. (Upside: we elected a much-better President than we would have, if it hadn’t happened …) It’s encouraging that we’ve seen sales volume remain at the same levels as last year; if sales had dropped, it would certainly be indicating a very dire situation. Meaning, everyone could only hope that prices went up or stayed steady this year, compared to last.

The rise in average and median sales prices show a return to market by those homebuyers looking to purchase at the high end of the market. This is a good sign for continued stability in the downtown Boston real estate market because these buyers were not able to take advantage of the federal government’s first-time homebuyers’ tax credit program plus many jumbo-mortgage borrowers may have encountered more difficulty this year in finding loans at acceptable interest rates, due to tightened credit and risk-adverse lenders.

The sales prices of condos in the South End and in other downtown Boston markets have been helped by a limited inventory – truly, only those who “have” to sell are selling. Fortunately, we have very few foreclosures in Boston Proper so homeowners are able to take a “wait-and-see” approach to the market.

The markets for condo resales and new condo developments are different, although inter-related. The data I’ve collected is solely for the South End, which has no new developments finishing up construction. Therefore, the neighborhood is somewhat isolated from the new product coming on the market in the 45 Province and Clarendon condo projects. (There are units still available at the Penmark, in the South End, but that project was completed prior to 3rd-quarter 2008 so would not be significant to this analysis – and, btw, there was one sale in the building in both 2008 and 2009 during these two months.)

The Bryant, a 50-unit condo development that recently sold ten units at auction may advertise itself as “Back Bay” but truthfully it’s in the South End. But, adding those units into the current sales inventory would not have much of an effect, and adding them into sales would skew the average and median prices.

Buyers of homes in the new developments would tend to be owners of properties in the suburbs – single-family homes. Since owners have been unable to sell their homes in the suburbs at acceptable prices, they’re sitting on the sidelines, waiting. This means few sales are happening in the new “ultra-luxury” buildings. I tend to believe that these developers can wait out the market and be happy with one or two sales, per month.

Data collected from third-party sources and reported by the Multiple Listing Service Property Information Network, Inc., for the periods September 1, 2008 – October 31, 2008 and September 1, 2009 – October 31, 2009.

Related posts:

1. Back Bay condominium prices rise Sept – Oct 2009 vs. Sept – Oct 2008
2. Boston condo sales report 2000-2009 released; prices up
3. Boston condo prices drop almost 10% during past year, W. Roxbury rocks!
4. Boston condo and real estate sales report, November 21, 2009
5. Downtown Boston condo sales show same results, 4-years running