Last month, ten of 45 available condos at the new Bryant Back Bay development were sold at auction. The goal of the auction was to generate interest in the project by selling a bunch of units at once, at big discounts, in order to stimulate demand. The developer priced these units at an average of 30 percent off original asking price. The final auction prices were higher, between 17 – 29 percent, although two sold for more than 30 percent off and one for over 40 percent off.
Much has been made of this “discount”. The developer originally priced the units as high as $980 per square foot which, although not outside the realm of possibilities in the downtown Boston area, would put it in the “luxury” category shared by such top-notch developments as the Ritz Carlton Towers.
People have been vocal about the perceived “loss” (phantom) by the developer. One anonymous source (who I suspect is a prominent real estate broker in Boston) was quote in the Boston Herald calling it a “complete failure for the developer,” adding, “The units averaged $671 per square foot with parking. That’s not good news for Vornado. Buyers are paying $700 per square foot in the Back Bay and Beacon Hill for walk-ups without parking.”
Meow.
Well, I’ve got a news flash for you: the prices were well within typical prices for new construction in the Back Bay.
A full analysis of the auction results was never performed, until now.
I’ve attached four spreadsheets.
The first includes all condo sales in the Back Bay and Beacon Hill for the period 01/01/2007-09/01/2008 (height of the market, prior to Lehman Brothers) for three-bedroom units between 1,700 – 2,500 square feet, plus I’ve added in the closed sales at the Bryant even though they took place post-9/1/08.
The second includes all condo sales for the past six months for three-bedroom units between 1,700 – 2,500 square feet in the South End, Back Bay, and Beacon Hill neighborhoods.
The third is new development (or luxury conversion) condo sales in the Back Bay and South End neighborhoods for the past three years for three-bedroom units between 1,700 – 2,500 square feet.
(I’ve included a fourth spreadsheet of Midtown Boston condo sales for the past three years to show how prices at The Grandview and Ritz-Carlton Towers compared – you’ll see that they have higher average prices.)
As you can see, the average prices per square foot were within the same range as sales of units in other large condo developments including the Penmark, Atelier 505, Wilkes Passage, and D4. (Those were all “resales” while the Bryant was original sales directly by the developer.)
What this means is that the sales prices at the Bryant Back Bay were not indicative of anything, one way or another. They did not signify any drop-off in pricing nor did they imply any continued resiliency or strength in the market. They were ten sales that should simply be added to the rest of the sales data and analyzed as such.
The units at the Bryant Back Bay are unique for several reasons, the biggest being that they are much larger in square footage than the typical Victorian home condo conversion or even in the Ritz-Carlton Towers, Grandview, or other “premium” developments.
Regardless of the numbers, however, there are a couple of facts that neither side can ignore: 1) the project is not in the “Back Bay”, it’s in the South End (meaning, people “wear short-sleeves” here [historical reference]; 2) the real estate market today is not what it was two years ago and the project was completed a year later than expected so it missed out on the “boom”; and, 3) the full-floor, three-bedroom layouts were at first glance a great selling point but, to many, the additional space did not make up for the other problems – the location as well as it being back up against an office building, meaning views were limited for many, but homebuyers ended up deciding the extra space wasn’t worth the money, and bought elsewhere.
It remains to be seen what will happen next with sales of units in the just-completed Clarendon, 45 Province, and W Residences projects. I do not consider the results of the Bryant Back Bay to be relevant to the results of those projects, at all.
Attachments (all .xlsx format):
Last six months sales, all condo-types, 3-beds, 1700-2500 SF
Last eighteen months sales, new developments, 3-beds, 1700-2500 SF
Last three years sales, new developments, 3-beds, 1700-2500 SF
Midtown Boston sales, last three years, 3-beds, 1700-2500 SF
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