Pricing vs. Activity in Boston's Luxury Condomium Market

Yesterday a Boston Herald headline declared a precipitous drop in Boston's Luxury Condo Prices in the $500K and up range, citing year-over-year statistics compiled by the Warren Group. So there's pricing...and then there's the related (assumed) characterization of inactivity. As article Author Thomas Grillo seems to frame, there is sweeping generalization that little (if anything !) is trading in the luxury condo market. That it's a little quiet. That fewer would-be luxury condominium buyers are considering buying, primarily due to reversals in the stock market earlier this year, and a decline in net worth. That liquidity is now more precious than investing in the right home.

To be sure, this has been a year of adjustment across all industries. However, putting the relevance (or lack thereof) of year over year stats and "trends" aside, as Boston luxury condominiums go, the market has hardly been inactive. It makes sense to consider the many units that have traded....approximately 770 units in inner Boston neighborhoods. In these same neighborhoods, 192 units above $500K have gone under agreement over the past 90 days.

...Is that in decline from previous years? Affirmative. Have there been downward pricing adjustments on a unit-by-unit, development-by-development basis? Absolutely. Have some units remained on the market longer and List to Sale Price percentages increased? Sure. Are some sellers continuing to look backwards, uncomfortable about pricing their units appropriately for the current market? Without a doubt. Pricing may be one thing, but has the bottom dropped out in terms of activity? Categorically not. Are there amazing opportunities to buy a great, high-amenity unit in a first class development at a decent price? Yes.



Sources:

"Fall Floors out for Boston's Luxury Condo Prices" Thomas Grillo, Boston Herald, September 9, 2009

New England Multiple Listing Service


http://www.bostonherald.com/business/real_estate/view.bg?articleid=1196267