2007 has been an interesting year for Boston Condos. The murmur heard on the street is that there is a tremendous amount of inventory on the market, the market is beginning to favor the Buyer more than the Seller, and the Boston real estate market is in a slump. It’s easy to follow what you hear, rather than digging into the statistics to find out what is really going on. So let’s dig into the statistics by analyzing the first quarter (Q1) of both 2006 and 2007 to see what nuggets of information we can find.
Before we look at the numbers, the assumptions that we are working with here are:
- Properties are deemed to be condominiums
- Properties are in the city of Boston itself
- Sold properties represent those that undergo a change in ownership (i.e. we are not counting those that are under agreement)
Let’s take a different look at the situation. Let’s determine how many Boston condos sold in Q1 2006 vs. Q1 2007. To stimulate some conversation, let us try and determine whether the activity (sold condos) and the amount of market consumption year-on-year is the same, regardless of how much inventory there is or is not on the market. During the first quarter of 2006, the total number of condos that sold in Boston was 834, and the average number of days that a condo sat on the market until it sold was 95. Contrast this with the first quarter of 2007, where the total number of condos sold was 861, and the average days on market was 130. So, year-on-year, we see a paltry 3.2% increase in the number of properties sold, and a whopping 37% increase in the days on market. Combine this with the sales to list price ratio (a condo sold for what percentage of the price at which it was listed) that stayed relatively the same year-over-year, and you don’t have a lot of concrete information to use in order to speak negatively about the market. Bottom line, the market consumed slightly more condos in 2007 than in 2006, and it paid relatively the same premium for those properties. Maybe you are thinking that with the bump in days on market, consumers may have paid less on a year-over-year basis? If so, you would be wrong! Boston condos appreciated at 6% when looking at the average sales prices (from roughly $458K to $486K) from Q1 2006 to Q1 2007.
What does all of this tell you? Well, you can draw your own conclusions, but the stats show us that the market for Boston Condos is performing at a steady pace year-on-year, and despite a shift in days on the market, condo prices continue to appreciate on the whole. If anything, with the new Boston Condo Developments that continue to hit the market, we will continue to see the quality of condos increase, and perhaps along with that, prices.
For further information on Boston Real Estate, or to view the sales data used to stimulate this article, contact Boston Condo Guy.
Keith Munsell 
