The luxury condominium market is feeling the pinch.
Boston brokers who specialize in marketing upscale residences dismissed the numbers. They say 2007 first-quarter numbers were boosted by sales at large new condo developments that had opened the previous year, including the Residences at InterContinental. Indeed, 14 of the $1 million-plus units that sold during last year’s first quarter, or nearly 17 percent, were at the 130-unit waterfront property, according to The Warren Group.
“The numbers mean nothing to me,” said Daniel A. Mullin of Boston-based Daniel A. Mullin & Assoc. Mullin noted that new projects can prop up sales figures in any given year.
Beth Dickerson, a top-producing agent with Gibson Sotheby’s International Realty, agreed.
“I’m never surprised [by the numbers],” she said. “There’s always a project closing or not closing that can [lead to an increase or decrease in sales].”
But both Dickerson and Mullin acknowledged that buyers and sellers are being more cautious, particularly in the $1 million to $2 million price range.
“Properties are definitely receiving offers. It’s just taking a bit longer to pull things together,” said Dickerson.
According to MLS Property Information Network, condos priced at $1 million and higher actually traded faster in the first quarter compared to the same months in 2007. It took an average of 120 days to sell during the first quarter, down from 158 a year earlier, according to MLS PIN.
Buyers have more to choose from in that price range today. There were 246 condos available as of last Monday, up 9 percent from the 225 units listed for $1 million or more a year earlier, according to MLS PIN.
Notable sales in the first quarter include a 7,216-square-foot condo on the 29th floor of the Residences at the Ritz-Carlton Towers that fetched an eye-popping $8.5 million. Other head-turning sales included the former Commonwealth Avenue home of New England Patriots quarterback Tom Brady, which traded for nearly $5.3 million at the beginning of January, and a condo on Beacon Street that went for $4.5 million.
Pricing a Key
Mullin said correct pricing is critical for moving properties quickly. In April, Mullin sold a three-bedroom unit at Trinity Place in Copley Square for $2.4 million. The unit originally was listed for $2.49 million. Mullin said a purchase offer was made and accepted within three days and the property ultimately sold in three weeks.
But other properties haven’t moved for months, and Mullin argues that pricing may be a key reason.
“Some people are pricing property not on what the value is today but what they feel they need to get out of it,” he said.
A three-bedroom unit at 27 Rutland St. in Boston’s South End, for example, has been on the market for about nine-and-a-half months. Originally listed $1.23 million, the price has been reduced to $1.19 million.
An $11.5 million penthouse unit at 51 Commonwealth Ave. in the Back Bay has been listed for more than a year. The nearly 9,000-square-foot residence originally was listed in February 2007 for $13.99 million and the price was slashed to $11.5 million – an 18 percent discount – last August.
Dickerson, who has the listing, said she expects sales activity in the next two quarters to pick up as transactions in some of the city’s newest luxury properties begin to close.
They include the Residences at Battery Wharf, a four-building waterfront development in Boston’s North End featuring 104 condos and an upscale hotel, and Bryant on Columbus, a 50-unit development in the South End.
Prices at Battery Wharf range from $675,000 to $9 million, while units at Bryant on Columbus are priced from $1.5 million to just under $3 million.
Thirteen units at Battery Wharf, all over $1 million, were sold as of last Thursday, according to records from the Suffolk County Registry of Deeds. Three sold for over $3 million. Another 48 are under contract, according to David Theran, director of sales and marketing for Development Management Corp.
The Bryant on Columbus will be available for occupancy in the fall, as will the Mandarin Oriental, the deluxe Back Bay property that features 50 condos with prices starting at just about $3 million.
Rob Cohen, president of Boston Realty Advisors’ residential division, predicted that this year will be “very active.” He pointed to two units at Twenty Beacon, located on Beacon Hill, that recently went under agreement.
They include a penthouse unit that was originally listed by Boston Realty Advisors for $4.4 million in June 2006. Cohen took over the listing at the beginning of January 2008, with an asking price of $4.6 million. The price was reduced to $4 million in March – a 13 percent drop – and went under agreement in mid-April.
Cohen sold another condo in the same property that had lingered on the market since February 2006. The unit originally was priced at $2.49 million. Cohen became the listing broker in January, with a price tag of more than $2.22 million. The price was cut to $2.07 million and it went under agreement in April.
