For the first time in the region’s history, the median sale price of a single condo unit in Greater Boston is virtually equal to the median sale price of a single-family home.

“It tells a mammoth story about the change in demand of the type of housing people are seeking,” said Barry Bluestone, founding director of the Dukakis Center. “In 2000, condos sold for two-thirds the price of a single-family home in Greater Boston. Today, their median sales prices are virtually identical – and it’s being driven by demographics.”

The convergence of the price points is due to increased demand for high-end units from both younger buyers and current homeowners, according to the latest “Greater Boston Housing Report Card,” a report prepared by the Kitty and Michael Dukakis Center for Urban and Regional Policy at Northeastern University for The Boston Foundation.

Using data provided by The Warren Group, publisher of Banker & Tradesman, the report found that as of June 2015, condominiums in the five-county greater Boston area (Essex, Middlesex, Suffolk, Norfolk and Plymouth counties) sold for 99 percent of what single-family homes sold for in the same region.

Between 2011 and 2014, condos sold for about 89 percent of single-family homes prices.

The report calls this “a startling change in the housing market.” Bluestone attributes the change to the shift in demand from single-family homes to condominiums as both “empty-nesters” and Millennials eschew maintenance-heavy homes in the suburbs for the convenience and amenities of city living.

Rising Prices May Drive Buyers To Other Markets

David Bates, an agent with William Raveis in Back Bay who has been selling real estate in Greater Boston for more than 20 years, is a long-time observer of this trend. He says the city is getting more expensive as it gets more attractive.

“I believe that a new Boston is being created,” Bates said. “This is a new age for Boston. It feels different. It used to feel dangerous; now it feels a lot less dangerous. Before we had an older, cramped inventory; now we have more amenities. That stuff costs.”

Companies are moving to Boston at an unprecedented rate, and today’s younger workers want to “live, work and play in the same area.”

“Add to that, the cost of construction is being driven up, so the so the biggest profits are in the luxury sector – and there’s more coming on line,” he said. “Barring some kind of serious change, condo prices will climb a little more.”

But nothing – not even skyrocketing condo prices – can last forever, and when they hit the ceiling, “what will happen then is the things that have traditionally happened: people will move the next market over,” Bates said. “Instead of Somerville, people will move to Medford; when that gets too expensive, they’ll move to the next market over.”

Simple Economics

The most basic economic principle is at play – the laws of supply and demand. Everyone wants a piece of the Boston condo market.

“Inventory is extremely low and demand is quite high,” said Frann Bilus, a downtown Boston condo agent with Otis & Ahearn. “The units in the luxury, high-rise buildings are being bought by Millennials, first-time buyers, empty nesters and a significant number of foreign investors.”

Bilus said this “multi-pronged, diverse group of buyers” is driving up demand – and prices.

“They’re paying high prices,” Bilus said. “Luxury condominiums are often selling at $1,500 per square foot or more. In all of 2007, four condos in Boston sold at that, and this year so far there have been 69. It used to be $1,000 per square foot was the top of the market, and now it’s well over $2,000 per square foot.” Until there’s a greater balance of supply and demand, prices will continue to rise.

Bilus said buyers are signing purchase and sales agreements on luxury units up to two and a half years or more before they can be occupied – often before construction has even begun.

“Units in some buildings are pre-selling before they reach the construction phase,” she said. “Millennium Tower is under construction and it’s already more than 90 percent pre-sold. It’s not scheduled for occupancy until summer 2016. There is very little new construction on the market right now and they get scooped up very quickly.”

The competitive market is pressuring buyers to make more aggressive offers, according to Bilus. She said that while fewer buyers are getting into bidding wars, many are waiving their mortgage and home inspection contingencies to make their offers more attractive to sellers, which is a risk she does not advise her clients to take.

“Sellers have been very aggressive because they know demand is high and inventory is low and they’re pushing the envelope on pricing, but that’s changing now, too,” she said.

Bilus expects the trend of rising condo sales prices to continue in 2016.

“I hope there will be more inventory, because there are buyers out there who are ready, willing and able to buy for the right place,” Bilus said. “I don’t know if we’ll get more inventory, but I hope we do, so it becomes a more balanced market.”

The producers of the 2015 Greater Boston Housing Report Card are sounding a similar alarm. The report recommends the state encourage larger, denser construction projects to help balance supply and demand and stabilize prices. It also acknowledges this will be a tough sell to suburban constituents.

“Using numbers from the Metropolitan Area Planning Council, we expect that in the 20 years between 2010 and 2030, there will be an additional 74,000 25- to 44-year-olds and 280,000 additional people aged 65 and over,” Bluestone said. “This is only the beginning.”