David Bates

Jay Rooney* grew up in South Boston and over the last 10 years has often been recognized as the most active listing and selling agent in that competitive market. Recently, I spent a few minutes with Jay discussing what is happening in this year’s South Boston market.

Can you describe this year’s condo market? It’s like a lot of other markets in and around Boston: Inventory’s extremely low and there’s a high demand for condos, and new construction condos in particular, so it’s a tight market both for buyers and for brokers who typically list a lot of property.

South Boston is one of the few Boston markets that sees a lot of small development. Can you tell us a little of what’s happening in that part of the market? There are developers building in South Boston that up until two years ago had never done a project in South Boston. They were over in Charlestown and Downtown Boston. So, over the next year, you’ll continue to see a lot of the commercial properties continue to be re-zoned and transformed into residential buildings, but the inventory of those properties is dwindling as well, so I know some of my developer clients are starting to look in other areas where there’s more land and more opportunity.

Offers in South Boston appear more aggressive this year. Is that what you are seeing? If something’s priced right, it will typically sell in a matter of days for well over asking price. There are instances where people are getting a little bit aggressive with their asking prices and those properties will sit, but for the most part anything that’s priced correctly will sell in 48 hours for well over asking price.
Can you talk a little bit about the recent appreciation of prices in South Boston? I remember a 1,000-square-foot, two-bedroom, two-bath condo in great shape selling for $400,000 to $450,000. That’s going to sell for $600,000 to $700,000 now.

Will a buyer get parking for that price? Yeah. If it’s up in the $700-a-square-foot range you will, but I’ve seen instances where people are buying in the mid-sixes at nice locations without parking.
What is happening in the South Boston high-end condo market? We’re seeing numbers over the last year in South Boston that we’ve never seen before, in that more condos are selling for well over $1 million. I never imagined the day when someone would be spending a million bucks for a condo in South Boston, but that product would sell for $2, $3 million in Back Bay, so it’s still a bargain. And based on the investment that’s slated for the Seaport, it’s safe to say someone that pays that kind of money for that kind of property might make out in the end.

Who is the South Boston buyer today? You’re starting to see a lot of empty-nesters who historically were buying in the Back Bay come over to South Boston because they wanted to be near the Seaport. If they’re coming from Scituate or Hingham, they’re buying in South Boston because they are used to being near the water. We have a lot of South End and Charlestown buyers buying in South Boston right now.

What are the attractions South Boston has for these buyers? We have the cleanest beaches around and we have lot and lots of new bars, restaurants, boutique shops, dessert shops, and cheese shops opening up on Broadway and down the Seaport, and the proximity to the city is still as good as any area outside of downtown Boston. People feel safe in South Boston as well, so that’s a big factor in them investing there and living there.

Is the rise in prices causing some of South Boston’s traditional buyers to get priced out? Dorchester and East Boston are doing to South Boston what South Boston has been doing to the South End and Back Bay. You get more for your money in Dorchester than you do in South Boston right now, so a lot of those $400,000 to $450,000 two-bedrooms condo buyers are over in Savin Hill, Popes Hill and other parts of Dorchester where there’s a lot of development going on. Additionally, I know a lot of buyers have been frustrated to rent until this market stabilizes a little bit.

*Disclosure: Jay Rooney works at William Raveis Real Estate, the same firm where I am an agent.
David Bates is a broker with William Raveis Real Estate and author of The Bates Real Estate Blog, www.BatesRealEstateReport.com, and a recently published e-book, “Context: Nine Key Condo
Markets, 2.0.”