High demand. Low inventory.
These are two little phrases that you've probably heard a lot in the past year. The condo market is on fire in Boston. A friend of mine recently sold his one bedroom condo in Back Bay (Beacon & Mass Ave). Within a day he had multiple offers; within a week he accepted an all cash bid, near asking price. Gaetano Morello, the seller and broker/owner of Morello Real Estate, has worked in real estate for the past 10 years.
"The low supply of inventory coupled with historically low interest rates gives sellers the advantage to sell quickly and on their terms in today's market. The market is highly competitive -what I am seeing is a lot of highly liquid, foreign investors making strong offers; typically all cash with very few contingencies. As hot as the market is today, I would caution buyers to be strategic about their purchases, especially as interest rates begin to rise and the supply of new condo stock hits the market going forward."
-- Gaetano Morello
Deals like this are not only common, but have become the norm in Boston. Buyers in some instances know about properties coming on to the market before their agents.
With low inventory, enter higher prices. Median sales price for condos have rose 5.5% since last year, and that figure continues to grow. So how and when, is the market going to stabilize?
Boston's Seaport District has seen tremendous growth over the past few years. From restaurants and commercial office space to Pier 4 and the Watermark boasting 365+ apartments each, it seems the Seaport is the hub of the Hub's development. The only problem, no condo development. Not since 2007's FP3 building, have we seen new condos hit the Seaport.
So what now?
Thankfully Boston is slated to see hundreds of new condo units in the near future. The only downside, most won't be completed for two years.
- Located in Boston's Downtown Crossing, it will include over 400 luxury condos ranging from one to four bedrooms
Sepia at the Ink Block
- Located in the South End at Harrison Avenue & Traveler Street, it will include 83 condo units
Christian Science Church Plaza
- Located in Back Bay at Belvidere & Dalton streets, it will include 170 condos
- Located in East Fenway on Westland Ave, the converted Symphony Parking Garage will house 48 new condo units
40 Trinity Place
- Located in Back Bay next tot the John Hancock Tower, it will include 115 condos
The construction of theses projects will boost the condo inventory and hopefully slow down the rapid price increases. In the meantime, Boston will most likely continue to see the steady rise in condo prices. Developers will continue to seek out new projects all over, sellers should expect to receive at or above asking price and many buyers will have to wait until the the median condo price levels off.
A question for homeowners to consider, how long can one wait? The market is red hot and there are buyers aplenty. Do you hold off for another year in the hopes of getting a better price? Or do you sell now, assured that you'll find a buyer? How long is too long to wait?