Boston apartments are becoming increasingly exclusive. Back in the spring, The Boston Globe reported that the prices of Boston luxury condos were soaring. The average price to live in downtown Boston—as well as other hotspots like the Back Bay, the South End, and Beacon Hill—had surged to nearly $1 million. This hefty price tag was the result of a more than 17 percent jump in condo sales during the first quarter of 2014.
The report noted that luxury apartments were “flying off the market,” selling in an average of 20 days. This figure was particularly notable since luxury units have traditionally been the slowest sellers—they sold in an average of 167 days during the same months of 2013.
Fast forward to this fall, and real estate experts are continuing to comment on Boston’s record-breaking luxury real estate market. In fact, Curbed Boston recently identified “lots of new luxury apartments” as one of five trends that are currently dominating Boston real estate.
Debra Taylor Blair, president of LINK, Inc., noted in the Globe that Boston has undergone a “major transformation,” and is now approaching “more of a New York City lifestyle.” Part of creating that lifestyle means providing the continuing influx of transplants to the city with ultra-high-end housing that costs well into the millions. This change has caused Boston’s housing landscape to shift toward a luxury format as the norm rather than the exception in 2014.
The most recent Cutter Report, which identifies Boston real estate trends, states the numbers for high-end condo sales are still “off the charts” and show no signs of losing steam in the near future. What’s more, it’s not just that we’re seeing an increase in transactions—it’s that units are selling at higher values than ever before as well.
The report emphasizes that for million-dollar condos, the average price per square foot topped $1,000 year-to-date. That’s a 7 percent hike over 2013 for these Boston apartments—and a 19 percent raise since five years ago. Resales at the Ritz-Carlton towers continue to lead the pack in the high-end space, with the average gross price now surpassing $2 million.
A Higher Skyline
And the buyers are out there for those high-priced properties. Scott Van Voorhis reported on Boston.com just in August that a condo at Boston’s Four Seasons sold for a whopping $10.5 million—nearly $3,000 per square foot. Van Voorhis noted that this was thought to be the “highest amount paid to date, on a per-square-foot basis.”
Van Voorhis predicts that this upward pricing pressure on Boston’s luxury real estate market is just getting started. He notes that luxury towers are getting both taller and more expensive. Right now the city’s tallest towers are around 40 stories high. But new projects including the $700 million Christian Science tower in the Back Bay and the Millennium Tower in Downtown Crossing will stretch nearly 60 stories, raising the city’s skyline. These coveted buildings may fetch a previously unheard of $4,000 to $5,000 per square foot.
A Million Isn’t What It Used to Be
While a cool million bucks used to be plenty to seal a deal in the luxury market, Van Voorhis noted in another recent post that $1 million no longer guarantees a dream pad in Boston. Home buyers today must be prepared to go toe-to-toe with both deep-pocketed foreign investors (the luxury real estate market tends to draw Euro buyers by the dozens) and people prepared to plunk down full cash payments.
Curbed reports that it’s not uncommon for Boston buyers to show up at open houses with plastic garbage bags stuffed with cash to gain an edge on hot properties. It’s often no longer enough to compete with 20 percent, or even 30 percent, down since determined bidders may offer as much as 50 percent down to curry favor with sellers.
Foot in the Door
While the prices needed to break in to the luxury market are beyond the budget of many would-be buyers, these trends affect the rest of the market as well. For buyers determined to face these challenges, temporary furnished housing can offer a viable short-term solution. With property searches taking considerably longer than they used to, corporate apartments in and around Boston can help guests bide time in comfort during their house hunt.
Need Temporary Housing in Boston?
Furnished Quarters is a temporary housing provider with a wide range of furnished rentals and corporate housing and temporary housing in Boston. To learn more about how Furnished Quarters can help with your Boston real estate search, call 800-255-8117.