As residents anticipate the launch of several new luxury condo buildings in downtown Boston, most notably, the Clarendon Back Bay and the W Boston Hotel & Condos, along with the recent launch of 45 Province, the market for luxury condominiums is poising itself for an influx of additional inventory.

In the face of this influx, data from MLSpin, one of Boston’s two MLS systems, show that the $1 million + condo market year-on-year from July to August has remained somewhat steady in the number of units that sold, along with some increases and decreases across various measures.  On a whole the numbers have stayed relatively similar year over year. 

The data (see below table) demonstrate that there may be a trend beginning to surface in that luxury homes are being priced more aggressively out of the gate (possibly evidenced by a decrease in the highest condo sales price during the period), while still maintaining the sales to list and original price ratios from the previous year. 

Following the launch of the Clarendon and the W Boston, the city will see a hiatus in the delivery of large-scale condo developments for several years, as the W was the last major development in the city to receive financing before the credit crunch hit the downtown Boston real estate market.  While Buyers have a good assortment of luxury condo inventory to choose from at present, and that pool will grow with the onboarding of the Clarendon and the Boston W, the available choices are now on the table, with no surprises to come for several years.  If a luxury purchase is going to be made, this represents a time to compare  and contrast condos and condo developments to secure a unit that fits the lifestyle and desires of a Buyer, with a relatively low concern that there will be new condo options in the next 3-4 years.

The first half 2009 statistics are in, and the South End continues to drive the most unit sales of the major downtown Boston neighborhoods.  According to LINK, one of Boston’s two multiple listing service systems, the South End saw 238 condos sell during the first six months of 2009, ahead of South Boston with 204 condos sold.

Average and median South End condo prices in the first half of 2009 were $597,375 and $518,750 respectively, and average price per square foot across the neighborhood was $575.  The average days that a home sat on the market before selling was 96.  Compared to the previous six months (July through December 2008), the number of listings sold in the South End has taken a drop from 373, however, the other statistics have remained relatively the same, with average and median price at $601,324 and $512,000 respectively, and price per square foot at $588.

South End listings appear to be selling markedly faster than the downtown Boston average of 130 days on the market, but come very close to representing the downtown average and median sales price, $606,738 and $495,896 respectively over the past six months – overall, this represents a slowdown from the previous six months where downtown Boston average and median sales prices were $708,657 and $503,364 respectively.

Across the downtown Boston neighborhoods, the Back Bay continues to drive the highest average sales price and price per square foot at $1,110,356 and $769 respectively.

After moving through June, traditionally one of the most active months of the year for real estate transactions, the downtown Boston residential real estate market shows interesting signs of vitality.

Over the course of 2007 to 2009, during the month of June, the number of listings that sold (see table immediately below) in downtown Boston has steadily decreased, along with average list and sale price.  Sale to list price ratio has remained relatively steady in the mid 90 percentile, in part meaning that homes continue to be priced by Sellers in line with the expectations of Buyers, albeit, on average, lower.

The amount of time that a property is remaining on the market, however, has been decreasing year over year.  And if we look at a snapshot of what homes are/were on the market in June of each year from 2007 through 2009 (see table immediately below), inventory levels are staying relatively steady (with a slight increase).  The average list price for a home in downtown Boston has trended up, yet this is largely a function of multiple $10 million + properties that are on the market currently.

While the data herein represents an admittedly small slice of current market conditions, and thus it’s dangerous to make too many far reaching assumptions based off of a cursory analysis, some insight is provided.   Rather than focus on (the decline of) average list and sale price of homes in downtown Boston, a figure that can be swayed by a potentially unrepresentative mix of homes actually sold during the analysis, let us key in on the average days on market (DOM), along with inventory levels, and sale to list price ratio.  The amount of choice Buyers have on the market is as good as it has been in several years, however, homes are being priced relatively accurately (in the context of what Buyers are willing to pay versus the expectations of what Sellers are willing to list at), and relatively speaking, units are selling faster than they have over the past several years.

Data was compiled using the Boston MLS (MLSpin) across the downtown Boston neighborhoods of Back Bay, Beacon Hill, Financial District, Leather District, Midtown, North End, Seaport District, South Boston, South End, Fenway, Theatre District, Waterfront, and West End.