The surging Boston condo market may finally have done the seemingly impossible: resurrected three downtown high-rises.
The three projects – the W, the Clarendon and 45 Province – all came to market in 2009. Launched with much fanfare in to the worst real estate market in half a century, the projects languished for years, selling units in dribs and drabs. But now that the market has begun to revive, the three are in recovery, with at least two of them likely to sell out before year’s end.
“It’s been a busy spring,” said Bruce McCue, an agent with Atlantic Associates Real Estate, a Boston luxury brokerage. “Inventory is at an all-time low and demand is at an all-time high.”
Of the three, the Clarendon has emerged the winner, with 94 percent of the 103 units sold as of the middle of May and several more under agreement, according to agents familiar with the building. For a building that managed to sell 21 units last year and 36 the year before, it should be on pace to close out the building well before the end of the year.
But the once-bankrupt W, with 80.3 percent of its 122 units sold, doesn’t lag too far behind. And even 45 Province – where sales nearly ground to a halt entirely during the crash, with only 11 units sold in all of 2010 – is picking up steam, crossing the 100-unit sold mark last month and as of this writing standing at 103 of its 137 units gone, just over 75 percent.
“The Clarendon obviously was an unqualified success. They kept at it, and they had good product. People might say, well, it should have been faster, but even in a great market I don’t know how much faster it would have been. With the other two, I think it will be dribs and drabs,” said John A. Keith, a Boston-area agent and blogger.
What’s Next?
The open question now is what will happen not over the next six months but over the next several years, as the current supply of new construction dries up but before some of the projects now in the pipeline, like the redevelopment of the Filene’s site and the TD Garden, are complete
The only other project close to completion is Millennium Place, a 256-unit building on Washington Street. Kevin Ahearn, co-broker/owner of Otis & Ahearn, said the builders had projected a two-year process to fill the large building but may find themselves twiddling their thumbs come opening day, with all units accounted for.
After that, “there’s nothing on the horizon for the foreseeable future,” said Ahearn. With approximately two month’s worth of available inventory in the high-end condo market as of this spring, any further tightening could send prices soaring.
The existing projects are already seeing price appreciation. A two-bed, two-and-a-half bath condo above the 20th floor at the W averages $992 per square foot in 2011; this year, the same apartment was selling for $1,090 per square foot. At 45 Province, an average two-bed, two-bath condo went for $762 per square foot in 2011 went for $954 in 2013.
In the meantime, “people are expanding their search, they’re expanding their requirements…You might not get the view that you really want to have,” said McCue. “But it’s kind of like musical chairs. When the music stops, there’s going to be some people left out.”
With areas like the Seaport or even Downtown Crossing, “there’s so many acres that have to be filled before you feel like you’re in a real neighborhood,” said Keith. High-end buyers are looking for a location where conveniences and amenities are already in place, and may prefer to rent in a more central location than purchase in an emerging neighborhood.
On the plus side, that means “there’s a lot more construction that needs to be done,” Keith said.
Email: csullivan@thewarrengroup.com
[Editor’s Note: The article has been corrected to reflect that only 103 of The Clarendon’s units are residential. Also, the original version of this article misspelled Kevin Ahearn’s name.]
