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.

Whether you believe in global warming or not, there is no mistaking the fact that humans make an impact on the Earth. In an effort to maintain a healthy planet, it’s imperative that we take steps now to help preserve our environment for future generations. Though there are many ways this can be achieved, it’s best to start off small with simple steps to help reduce our carbon footprint, conserve energy, and lower utility bills. One of the easiest ways to make these things happen is by making small changes to your condo through the use of eco friendly home lighting.

There are a number of benefits to utilizing eco friendly lighting, and it’s rather simple to get started. The easiest method is to replace standard light bulbs with Compact Fluorescent Lights or CFL’s – these are the light bulbs featuring a distinctive swirly design. Not only do CFL bulbs last up to 10 times longer than standard bulbs, but they also use roughly 25% less energy. Over time, CFLs can lead to a sizeable reduction in monthly electric bills – reducing energy consumption cuts down on the amount of fossil fuels, coal, and natural gasses used to power homes.

Once actual light bulbs have been switched out, focus can be shifted to light fixtures themselves. Modern lighting fixtures that feature the Energy Star seal of approval have been extensively tested and certified as environmentally friendly. Energy Star is a government-backed program helping businesses and individuals protect the environment through superior energy efficiency. You can find the Energy Star logo on a wide variety of products, many of which are home light fixtures. When a product like a lamp, pendant, or overhead light features the Energy Star logo, the product meets all the requirements set forth by the EPA and the US Department of Energy. Today many Realtors use the presence of Energy Star products as a major selling point in the context of a green home. Condo buyers are focusing more heavily on environmentally friendly amenities and they also know that more efficient products in the home equates to lower energy bills and more money in their (and potential buyer’s) pockets.

Eco friendly lighting initiatives play a big part in Boston’s green building projects. The addition of eco friendly light fixtures is one of the many steps taken to help produce new energy efficient homes for today’s marketplace. The Macallen Building, for instance, has used a vast array of green practices in the design and development of 140 high-end environmentally friendly condos. While lighting is but a small part in the overall scheme of the eco friendly home, it is certainly an important part of the city’s goal of building towards a brighter future.

Over 900,000 USA households are in the foreclosure process, up 71% from a year ago, according to a survey by the Mortgage Bankers Association. That pan-USA figure represents 2.04% of all mortgages in the USA, the highest rate in the report’s quarterly, 36-year history.  What does that mean for those looking to buy downtown Boston real estate, especially a foreclosure “deal”?  Not much.

Ultimately, USA foreclosure statistics have little applicability to downtown Boston for two reasons, the first revolves around the fact that the number of foreclosures in downtown Boston is quite low, and second, simple supply and demand economic forces in the city center prevent  any foreclosure pricing “deal” opportunities – these forces erode any price point differentials between market and foreclosure prices.  Foreclosed homes stay at their foreclosure list prices because of supply gluts, and the economics of Boston’s real estate market prevent the surges in supply of “cheap” homes to support the market dynamics that are being seen in the hardest hit housing markets in the USA.

A compilation of 2008 (January – October) Boston foreclosures by the Boston Globe shows that there was one foreclosure sale in downtown Boston during the first 10 months of 2008 – yes, many more outside the city center, but the downtown market demonstrates significant insulation to foreclosure pressure.  The single unit was a Leather District loft-style condo that sold for $443 per square foot, more than $100 more per square foot than current high-end units at the newly renovated Beach Street Lofts are selling for.

Case in point for the economic forces of the downtown market on a bank-owned unit offered to the public was 10 Hanover Street unit 3, a one-bedroom one-bathroom 690 square foot condo in the North End.   In June 2008,  the condo hit the market for sale, and was listed at $274,900 ($395 per square foot), a very attractive price for the unit and the neighborhood. We worked with clients to move quickly on the property, despite this, there were over 20 offers on the unit, and it closed two months later for almost $100,000 more than the list price at $365,000 ($529 per square foot).  In the end, the short sale property didn’t really end up offering the value for which Buyers were clamoring. In 2008, the average price per square foot in the North End was approximately $600.  This example highlights that simply supply and demand in downtown Boston prevent foreclosure “deals” from occurring.

Unit 809 at the Ritz Carlton will be an interesting condo to follow to see if the theory checks out.  Unit 809 is a 1+ bedroom 1.5 bathroom 1,357 square foot unit in the Ritz Carlton Millennium Towers that is a bank-owned property recently listed for sale at $679,900 ($501 per square foot), and represents almost a 50% discount on the average price per square foot in the building – granted, the average price per square foot is being inflated substantially by several other recently listed properties in the development, including Manny Ramirez’s Ritz Carlton condo. Unit 809 is being sold as is, and is competing against 8 other units that are priced under $700 per square foot, the others at “market prices”.

The economics of supply and demand in downtown Boston trumps any “deal” that a Buyer assumes can be had by finding a foreclosure.  The first hurdle lies in the absolute number of foreclosures in the city center, there really are none, and when coupled with the supply and demand forces present in the city, the idea of a “deal” on a downtown Boston condo quickly becomes elusive.

In 2008, the Boston Condo Blog grew into one of the most popular real estate news sources in Boston.  Some innovative new ideas are planned for 2009, but it’s worthwhile to take a look back at the most popular articles that generated reader interest in 2008. Here are the top 10 most read articles from 2008 here at the Boston Condo Blog.

1. Boston W Hotel and Condos – we have put together some of the most exclusive photos and content surrounding the luxury Starwood brand hotel and resort that will launch in late 2009, going all the way back to the transition of the property from a parking lot to a large hole in the ground.
2. Boston Parking Spaces – our downtown Boston parking spots page has become a top destination for those who want to buy and/or sell a parking spot in Boston.
3. Banq Restaurant to Open at Penny Savings Bank – few restaurants in the city generated as much buzz as Banq did.  The historic Penny Savings Bank deep in the South End was completely renovated in 2007, and is now home to luxury condos, as well as commercial space, which includes a bank (how appropriate), and the new upscale Banq restaurant.
4. The 1850 New South End Condo Development – along the southern border of the South End, a new loft-style condo development called the 1850 launched, we were one of the first to bring you exclusive photos and a comprehensive overview of the property.
5. Broadluxe Condo Auction Results – we were the only news source that stayed with the Broadluxe condo development as it changed ownership hands through foreclosure, as well as pre and post auction.  With the last Purchase and Sale Agreement at Broadluxe was recently signed, (tentatively) marking the end of a successful, and rather short, sales cycle.
6. Prices at Macallen Building – being the first green condo development in Boston, the Macallen Building has received a lot of attention even before its opening in the summer of 2007.  Approximately 50 units in the building remain unsold, and pricing at the development is of interest to many who want to call the green building home.
7. 285 Columbus Lofts Buck Downtown Boston Trend – 285 Columbus Lofts, a new loft-style condo development at the northwest corner of Columbus Avenue and Clarendon Street surprised many with the sales velocity that the developer established in pre and post construction.  The development offers a combination of highly desirable amenities, in a superb location, and Buyers to notice.
8. $100K Price Changes at D4 Condos – one of two historical landmark buildings in the South End (and the city for that matter) that have been converted into luxury condo developments, the Philippe Starck designed D4 Condos are approaching sold out status, but only after undergoing several price reductions.
9. Nothing Standard About Standard Purchase and Sale Agreement – one of our guest bloggers, Rich Rosa, a real estate attorney in Massachusetts, put together an excellent article about one of the most important documents in the real estate transaction process, the Purchase and Sale Agreement.
10. Warm Welcome from the Clarendon Back Bay – the sales staff for the Clarendon Back Bay, one of the city’s latest ultra luxury condo developments, hosted us immediately following the opening of the official sales center on Newbury Street.  Despite a slowing luxury market, the combination of amenities and location at the Clarendon continue to drive Buyer interest.

We look forward to another exciting year in Boston real estate, and a whole new set of top 10 articles in 2009.  Happy New Year!

The presence of an in-house concierge in a condo development typically signifies high-end living, and Boston is not running short on luxury downtown condo developments.  For the first time, we bring you a comprehensive list of downtown Boston condos for sale with a concierge (alphabetical order):

• 210 South Street (Leather District)
• 285 Columbus Lofts (Back Bay)
• 360 Newbury (Back Bay)
• 44 Prince Street (North End)
• 45 Province (Midtown) – many Boston homebuyers search for “Beacon Hill condos for sale with a concierge”, while 45 Province is consdered to be in the Midtown neighborhood, it’s reasonmable to claim the luxury condo development is in the Beacon Hill neighborhood as well.
• 75 Clarendon Street (South End)
• Albert A. Pope Building (Back Bay)
• Atelier 505 (South End)
• Battery Wharf (Waterfront)
• Boston W Hotel & Condos (Midtown)
• Broadluxe (Financial District)
• Bryant (Back Bay)
• Burroughs Wharf (Waterfront)
• Channel Center (Seaport District)
• Charles River Park (West End)
• Constellation Wharf (Charlestown )
• Court Square Press (South Boston)
• D4 Police Station (South End)
• Dockside Place Condominiums (Seaport District)
• Flagship Wharf (Charlestown)
• Folio Boston (Financial District)
• Four Seasons Place (Back Bay)
• FP3 Condos (Seaport District)
• Fulton Court (Waterfront)
• Greenway Place (Financial District)
• Harbor Towers (Waterfront)
• Heritage on the Garden (Back Bay)
• Intercontinental Residences (Waterfront)
• Lewis Wharf (Waterfront)
• Macallen Building (South Boston)
• Mandarin Oriental (Back Bay)
• One Charles (Back Bay)
• Parkside (Midtown)
• Parris Landing (Charlestown)
• Penmark Condos (South End)
• Ritz Carlton Towers (Midtown)
• Rowes Wharf (Waterfront)
• Strada 234 (North End)
• The Belvedere (Back Bay)
• The Bryant on Columbus (South End)
• The Charlesview (Back Bay)
• The Clarendon Back Bay (Back Bay)
• The Grandview Boston (Midtown)
• The Mariner (Waterfront)
• The Metropolitan (Chinatown)
• Tremont on the Common (Midtown)
• Trinity Place (Back Bay)
• Wilkes Passage (South End)
• Zero Marlborough (Back Bay)

This list complements another information-based article published recently about move-in-ready condo developments (see Move-in Ready Luxury Condo Developments).  For more information about luxury Boston real estate options with in-house concierge services, contact us using the link at the top of this page.

In between the hot dogs, Indy 500, Earthfest, and watching the Celtics go 1-1 over the weekend, 12 downtown Boston properties went Under Agreement (view the details 10 KB PDF).

We’re in the midst of the buying and selling spring and summer season, and even with a holiday weekend keeping many other things on our minds, real estate transactions continued to progress forward. 2 units at the Intercontinental Boston went Under Agreement, along with one of the still standing 210 South Street Leather District lofts. All said, the average listing price per square foot was $615 on these properties (actual sales price per square foot is pending on the close of each property).
Gas prices are topping $4 per gallon across the country, and the “rise of the city” is something that is becoming more of a reality every day (more thoughts on this soon).

The Wall Street Journal gave some press yesterday to “downtown” real estate markets, Boston included. Some comparisons were drawn between the 2005 market (which some say is the height of the market over the past 10 years) and today’s market conditions. Some of the statistics included in the article reference single family homes, which there are little of in the core of downtown, but the “press” is perhaps finally starting to realize that there is a difference between core downtown Boston real estate and the suburbs or pan-US housing.

Prices in the city’s core (Boston) are off less than 1% over the past year, according to first-quarter data from Listing Information Network, (one of) Boston’s MLS system. The real difference today is that homes are staying on the market for 111 days on average, up from 85 days in 2005.

Prices in key neighborhoods, such as Back Bay, the South End, Fenway and the Waterfront, are all up between 3% and 10%. Beacon Hill and the North End, however, are down sharply, as much as 33%. That’s partly the result of a slew of high-end properties that hit the market in 2006 and 2007 that were priced as high as $1.5 million, skewing the price data upward. Even without those sales, however, the median price would be down by double-digit amounts.

“No one is taking prices higher these days just to see if they can get it, like they used to,” Michael DiMella says of Boston’s downtown core. “But you have to come with realistic expectations. This is a highly desirable area, and you’re not going to find a steal.”

Given the supply and demand principles that are present in the city center of Boston, “deals” on real estate are truly few and far between – more to come soon on setting realistic expectations when it comes to downtown Boston real estate.

We have been working with more and more Europeans over the past six months, all of whom are interested in purchasing downtown Boston real estate, not because the core of downtown Boston is in a real estate crisis (see No Real Estate Crisis in Boston), but because their “dollar” (i.e. Euro) is going a lot farther than it ever has in the past.

In essence, since the launch of the pan European currency, called the Euro, we have seen a complete flip flop in its value. One Euro went from being worth less than 70 US cents in 1999, to now, almost 1.5 US dollars. The euro (currency sign: €; banking code: EUR) is the official currency of the European Union (EU), and has been implemented in 15 member states, known collectively as the Eurozone (Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, Spain). Yes, the UK still uses the Pound, but the trend there is the same; as demonstrated in the chart below, the Euro continues to appreciate against the dollar (i.e. one Euro is now worth almost $1.50, and has been moving up since 2003).

The one economic mantra that you are more than likely familiar with is buy low, sell high. The Europeans are contacting us because, at this point in time, they have the ability to buy low. For Bostonians, and those here in the US, prices aren’t “low” (and in real terms, prices continue to rise in the core of the city, more to come on this soon), however, for Europeans, who currently enjoy the fruits of a currency trend whereby their Euro now buys more dollars, prices are low, and they are seizing this opportunity.

We talk with a growing number of Europeans each week who are interested in buying Boston investment property, or a Boston vacation home in one of America’s most historic cities. Europeans recognize that downtown Boston real estate will always hold its value, and the best time to “get in” is when their currency allows them to do so at a discount.