We’ve received some questions lately specific to the South End condo market, most notably, how are things going? The main claim that we have been hearing on the street is that the market has “slowed down” and also that “prices are falling”. Speaking with local real estate experts who specialize in the downtown Boston real estate market can be helpful, but viewpoints can oftentimes be swayed by current personal success and business level, so that’s why it’s a good idea to take a look at the cold hard facts and draw conclusions straight from there.
We’ve tried to take an objective look at things by focusing on the past three months of data (i.e. August to October) in each of the past five years. Any impact from the significant financial issues that many US investment banks have played a part in creating, and are experiencing, and the fallout that these actions are creating for the remainder of the country will most notably be felt in later months of this year (from a real estate perspective), bearing in mind that most of the units that closed in October of this year, were Under Agreement some 30 – 45 days before their closing date. That said, while the analysis that we are about to walk through represents a data-driven look at the South End market, it may not be entirely “current”, as there are natural lag times built into looking at real estate information, much like any national economic report.
Note that all information has been pulled from the Boston MLS.
South End Condo Sales Statistics
The first thing we will look at is the number of units that sold year over year. With this particular statistic, the number of condos that sold in the South End in 2008 (135) during the time period we analyzed decreased by approximately 25% from numbers the neighborhood pushed during the same period in 2007 (181) – a definite slow down. The 2008 number is slightly below the 5 year average (149).
South End Median & Average Home Prices
The only other “negative” statistic is median home price, which decreased approximately 3.6% from $555,000 in 2007 to $535,000 in 2008. A median home price decrease was countered by a slight 1% increase in average sold price. Keep in mind why we look at both median and average prices – when looking at housing statistics, be careful not to only focus on averages, also consider median values (the number in the middle of your data set), because averages can be pulled significantly one way or the other with only a small number of outlying data points.
South End Available Condos for Sale (Inventory)
The other notable statistic, from a significant change perspective, is inventory (i.e. how many condos are available for sale at any given time). 2008 inventory levels have decreased approximately 14% from what we saw in 2007 during the same period, and 2008 inventory is the lowest the city has seen since 2004. Combined with an average days on market of approximately 80 (which is a steady decrease since five year highs in 2006), and you have characteristics of what some might call a Seller’s market.
Selling price to original listing price ratios have stayed very strong for South End condos over the past 5 years, currently at 96%, with a five year average of 97%. As well, the million dollar + market has stayed stable over the past 3 years since a significant jump in the number of million dollar homes took place in 2006.
While the sheer number of for sale condos sold in Boston’s South End has decreased quite markedly from 2007 during the 3 month period we analyzed, median prices in the South End have stayed relatively steady and average prices have increased slightly. Inventory levels have decreased and Sellers are getting very close to the prices that their homes are being listed for (the original price itself, not after price reductions, if any). Regardless of the reasons behind Sellers listing their condos for sale, we’re not seeing evidence of “fire sales”, perhaps a testament to the quality of the South End as a neighborhood, and a destination for those who call Boston home. And while the market (when speaking about the number of condos being sold) has indeed slowed, the surrounding statistics paint a picture of a currently stable neighborhood.
Keith Munsell 
