In response to a recent inquiry from a reader.
“Hello, I’m hoping you’ll be able to offer some insight regarding the state of new condo sales in Boston. I live in Phoenix where we are over saturated with new developments and sales have slowed dramatically over the past year. Are new sales slow in Boston as well? Thank you for your time!”
Boston is in somewhat of a unique position when it comes to the onboarding of new condo developments and the inventory they create. While Boston underwent rapid buildout of a host of new condo developments over the past 5 years, the building trend has slowed, and the city now has only a small handful of new buildings that are in the pipeline – the Boston W Hotel & Condos slated to open later this year was the final large-scale condo development to receive financing prior to the global economic crisis that began to hit the institutional lending markets in 2007 (see Boston W Hotel & Condos Readying). That said, the market is what it is for the next 2-4 years, meaning, all of the inventory and potential choice is known by both Buyers and Sellers.
With that visibility, there are certain new (and recently built) developments that have a higher sales velocity than others, however, the wide breadth of choice in both building style and neighborhood has not stifled any one area of the downtown market, thus allowing for most new developments to be successful. Some more so than others obviously, and the market is responding appropriately via supply and demand, with for instance an auction at the South End’s 1850 recently to clear remaining inventory, to recent price drops at FP3 to stimulate further absorption of remaining units in the new Seaport District development.
The one result of absorbing new condo developments into the market that is implicitly obvious but was not explicitly predicted is the abundance, perhaps overabundance, of resale listings at existing premier buildings that aren’t accustomed to seeing higher levels of available inventory and turnover. As Bostonians make the “upgrade” to newer and slicker condo developments, they are leaving vacancies at a host of buildings that don’t typically have a host of for sale signs in front of them. For instance, there are 18 units currently available for sale in One Charles that are priced from $495,000 for a 610 square foot studio to $3,990,000 for a 2,420 square foot penthouse. One Charles opened its doors to residents only a few years ago, and was considered to be the new contemporary full-service place to call home on the edge of the Back Bay. Strada 234, the North End / Waterfront luxury building, with 8 units currently for sale is matching some of its highest inventory levels for the past several years, with condos priced from $649,000 for a 1,088 square foot 1 bedroom 1 bathroom to $1,199,000 for a Dennis Duffy designed 2+ bedroom 2 bathroom unit. And Four Seasons Place, the exclusive place to call home at 220 Boylston Street overlooking the Public Garden, currently has 6 units available for sale at the same time, perhaps 2 times higher than typical inventory levels, with units priced from $997,000 for a 972 square foot 1 bedroom 1 bathroom unit to $8,950,000 for a 4,022 square foot 3 bedroom 3 bathroom penthouse unit.
With new development delivery slowing, the downtown Boston market is absorbing the options with an “out with the old, in with the new” type attitude in some circles, yet the availability of inventory in existing buildings that is being created may very well provide the opening that others have been looking for to make a move of their own. Regardless, because there is now visibility into what the market entirely has to offer, for at least the next 2-4 years as it relates to the addition of new large-scale condo developments, a premium will be placed on those with the ability to comprehensively and accurately compare and contrast downtown Boston properties so that Buyers and Sellers can make informed and educated decisions about what condo, and condo development, most appropriately matches their lifestyle.
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Tim Ryan 
Good insights on the backroom working of inventories and how this affects the marketplace pricing. Lots to chew on in this article with the age old supply/demand getting less speculative because of the lack of new and upcoming building of condos. The few new developments sound like they are taking advantage of this and still doing well. Metrowest Boston does not face these same issues, but we’ll take care of those cityfolk coming to the “country”!