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

Boston Luxury Condos

In an effort to distinguish some of Boston's more luxurious developments, we've just launched our Luxury Boston Condos page.

We will be continually updating this section, as well as providing one-click searches of luxury MLS listings by neighborhood.

Costly Mistakes Buyers are Making In Today's Market

Buying a home is a very important decision in one's life. When purchasing a home many consider (amongst other things) money (financing), location, value and "vital features" the buyer's home must have. However, it is during this buying phase that many people make the most common mistakes that not only lead to buyer's remorse but can easily be avoided.

Many buyers go into the purchasing process with the belief that finding a home should take a lengthy amount of time. This is not the case. Sometimes buyers may find their "dream home" within the first few weeks of searching (some even within the first week!) yet pass over this home and continue to search. The reason for this is because many people often think that more "time and effort" is equivalent to how perfect the home will be. While purchasing a home is a major investment in the buyer’s life, the buyer if properly represented by their broker/agent should trust their agent's advice. Brokers/agents know what kinds of properties exist and which do not, what is available and what is not. Passing up a perfectly great home because it seemed "too easy" can be a bad decision for both the buyer and the agent. Your broker/agent is there to serve you and will advise you to help you make the best decisions possible. Buyers often feel uneasy about purchasing one of the first homes they have found, however with the proper guidance from your broker/agent this just might be the perfect home for you.

While purchasing a home is a large financial investment, buyers should not hold out on price if the unit they desire is their "dream home." When buying a home many buyers often think that they are spending too much money. However, if your reputable broker/agent and you do the proper research you may find the home is correctly priced. Backing out of a deal because of a small price difference can be a big mistake. Many buyers will always have a hindsight bias, where they believe they should have purchased in earlier years when "prices were more reasonable." However, in three years you may be saying the same thing about the unit you had passed up.

Another mistake buyers often make, is having the belief that buying a home is strictly for financial reasons only. If you believe the market is "unstable" and this is just a financial investment (like investment banking) then it will never be "the right time" to purchase a home. However, see purchasing a home as more of a way to meet ones goals, move your life forward, and possibly even a new adventure.

After making a large investment (such as purchasing a home) buyers often try to cut costs by not hiring a lawyer. Lawyers can not only help look over the fine print but make the buyer feel more secure with their purchasing decision. They can also take care of any last minute errors. Therefore, hiring a real estate attorney whose fees remain constant despite the price of the home you are purchasing is the best route to go.

Lastly, when searching for one's "dream home," make sure to really investigate the surrounding location. Many open houses are often held during prime time to make the residence look the best. You want to be happy with your new home 24 hours a day, seven days a week. Not seven hours a day three days a week. Come check out the area at night, the weekends, and even during rush hour. This way you know the home is exactly what you thought you were purchasing. And with an insightful broker/agent who may have even done the research for you, you are sure to be happy with your new residence.

Saying 'Goodbye' to the Big Dig and 'Hello' to the Greenway and the New Boston

Many often wonder if they will ever truly reap the benefits of Boston's Big Dig. With a lot of controversial issues, over-spending, and serious inconveniences, many Bostonians have thought negatively about the Big Dig. That is all about to change. Over the years, all we've seen from the Big Dig are clouds of dust, traffic backups and hundreds of construction workers. There is now a positive side to all the hassle. Such things as bike paths, green commons, beautifully landscaped parks, art exhibits, memorials, and private quarters are all part of the Big Dig's payoff, besides the dismantling of the central artery and smoother traffic flow. It has been projected that within the next several years, many beautiful and desirable features will exist in what will be the Rose Kennedy Greenway, or as, the soon to be household name, The Greenway.

Standing at the base of North Washington Street is the most noticeable aspect of this massive infrastructure development. the Leonard P. Zakim Bridge. This engineering feat, supported by cables, is a beautiful and architectural addition to Boston's scenic view. In due time (optimistically by Summer 2007's end) there will be more than a mile of green parkland (the Greenway). Such new features do not end here. In the North End there will be two blocks of parks running along Cross Street and over to North Street. A plaza nearby will feature a map of what the 'old Boston' used to look like (Boston five years ago).

As one of the countries most historical cities, Boston will be lined with bronze rails engraved with historical figures and quotes. The North End will have these bronze plaques inscribed with quotes from the North End's residents ranging from the early 17th century until today. Such features will not only add to Boston's beauty, but pleasure history buffs all around Boston. Side streets and main streets all along the central artery will be lined with trees and flowers. Ramps no longer stand in between North Street and Christopher Columbus Park, but rather another one of the Boston Museums architectural buildings. Every inch of the Greenway will have something different for condo residents.

The central portion of the Greenway is the four Wharf District blocks that go to the Boston Harbor Hotel. The outlines of the four historic wharfs (City, Central, Long and India) are identified by decorative paintings. However, the heart of the Greenway is the two blocks between State and India Street. This is where most of the activities are held, with fountains and greenery. Then there is the 31 story Russia Wharf office tower that casts a shadow on the Greenway. Although Russia Wharf is only air space at the moment, the approved plans and architectural renderings are something that everyone in the area must marvel over, and most certainly will, once the massive green, glass development is completed. Even Chinatown will have its own additions, with a park laced with bamboo and willows. Anyone lucky enough to become a resident along the Greenway, whether it be in the North End, Chinatown, Financial District or waterfront, is sure to enjoy themselves and the beauty of Boston even more, due to these incredible aesthetic and engineering improvements.

Boston Needs No Benchmark

Boston has once again been ear-marked as the runner up, second on the scene, younger sibling, and wannabe, to New York City. This past week's Boston Sunday Globe published the article "The Manhattanization of Boston", where the city's recent construction boom of high-end and high-priced condo developments was referred to as a reaction to what is already available and already been done in New York. If there's one thing Bostonians don't respond well to, it's beling pinned beneath the Big Apple, and being told they're unoriginal. However, later in the article, it was noted that many developers said it's less of Boston catching up with New York, rather Boston playing its part in an era of International modernism within urban condominium developments.

All of the developments mentioned in the article are featured on BostonCondoGroup.com. For more information on any of them, please click on their links below:

Residences at Battery Wharf

Residences at The Intercontinental

45 Province Street

Ritz Carlton Towers

One Charles

Trinity Place

The Belvedere

Mandarin Oriental Boston

Taj Boston

The Heritage on the Garden

Sources: "The Manhattanization Of Boston" Thomas C. Palmer Jr., The Boston Globe, March 25, 2007