By the end of April, Boston’s iconic Newbury Street will that have two new brokerage offices in its storefronts from firms that have historically held much smaller shares of the region’s luxury market – and which are hoping to grow.
Familiar brokerage names in Greater Boston’s luxury submarkets are facing new competition and new neighbors in high-profile locations.
Longtime denizens of Boston’s Back Bay like Campion & Co., Coldwell Banker, Berkshire Hathaway’s Warren Residential now rub elbows with Douglas Elliman and Boston Realty Advisors storefront offices, soon to be joined by a LandVest office.
In MetroWest’s heartland, Wellesley now has a new Elliman office and a new branch of Advisors Living – Boston Realty Advisors’ residential brokerage – joining an office MGS Group established there in 2021. And with an office in Concord Center, LandVest isn’t far away.
The region’s luxury market has undeniably grown since 2019, but for these expanding firms, growth has been motivated as much by opportunities as perceived needs to serve long-term clients across their whole lives.
Explosion of Pricey Property
The explosion of Massachusetts home prices over the last three years also lifted the luxury market.
In the five counties that make up Greater Boston, 1,238 single-family homes and condominiums sold for between $2 million and $5.99 million – what might be termed “entry-level luxury” – in 2019 according to The Warren Group, publisher of Banker & Tradesman. By 2022, that number had exploded to 2,149, a 72.59 percent jump.
The number of sales the next tier up, from $6 million to $11.99 million, likewise spiked from 76 in 2019 to 141 in 2021 before dropping to 105 in 2022. The highest tier, $12 million and above was more stable, with only nine sales in that category in 2019 compared to 24 in 2021 and 16 last year.
Some of that market activity, observers say, has been driven by an increase in luxury tower construction downtown, but as in other segments of the market, the pandemic and its after-effects also helped propel a wave of high-end buyers out into the region’s suburbs that’s still going strong today.
“Often people that enjoyed living in an urban environment would trade up from their two-bedroom to a three-bedroom penthouse. Now that people are working out of their homes, they need multiple workspaces. If you have a 4,000-square-foot home and three children, it gets kind of tight,” said Amy Mizner, a Realtor with Gibson Sotheby’s International Realty in Weston.
While the biotech boom of the last three years hasn’t on its own driven a significant bump in demand for luxury property in Boston’s suburbs, Mizner said, its diversified economy employs plenty of executives and managers who both want and can afford high-end homes.
A Need to Be Present
This strength made the region a natural place for New York City-based Douglas Elliman to target for growth, said Richard Ferrari, the firm’s president and CEO of brokerage for New York City and New England.
“Look at the price points. They’re not that far off of Manhattan right now,” he said. “Boston is a sleeper market when it comes to luxury. I mean, there aren’t many places in the U.S. that are nicer than [Beacon Hill’s] Louisburg Square.”
High-net worth buyers often seek second or third homes in many locations, said Slater Anderson, a vice president at LandVest and the leader of its Boston brokerage operation, so it’s important that a brokerage can have geographic reach to help clients find primary homes, vacation homes and pieds-a-terre.
Having geographic diversity helps agents and their brokerages maintain relationships over an entire lifetime, said Will Montero, a Gibson Sotheby’s Realtor in Boston and Mizner’s urban-focused counterpart on the Mizner + Montero team, founded in 2020.
“People buying these houses are very, very busy people. They’re running companies, they’re CEOs of Fortune 500 companies. When they hire you to find them a house, they expect you to get it done. It’s only when you don’t deliver that you lose a client,” he said.
Strategic Locations
That need to be present in multiple markets has helped push other high-end brokerages to grow locally.
“More and more people were saying to me, I have a place to sell in Boston, but I want to look in Brookline, Wellesley and Newton. It became an ongoing thing where I’d strategically take on properties [in MetroWest] but I realized I could really use bench depth in Wellesley, Needham, Dover and beyond,” said MGS Realty founder Maggie Gold Seelig.
The company plans to formally celebrate the opening of its permanent office space in Wellesley’s Linden Square later this year, but the office launched “literally out of client demand” in temporary space in October 2021 under the leadership of prolific MetroWest agent Teri Adler after what Seelig described as her “two-year courtship” of Adler.
Advisors Living’s sudden growth under CEO Merit McIntyre – 11 offices launched in elite or well-to-do suburban Boston communities in quick succession last year – has been the most aggressive of any brokerage focused on the market’s upper echelons.
Staffed largely with agents recruited from Compass and McIntyre’s former brokerage of Coldwell Banker, the offices are intended to plant flags in markets that “feed off each other” by generating move-up and downsizing buyers, McIntyre said, and capitalize on Advisors Living’s existing strength in commercial brokerage and selling newly-built luxury buildings downtown.
James Sanna
“The third element we offer, which most can’t, is the commercial end. Think of the executive who has a house in the suburbs, a house on Nantucket and then they have a taxable event and they say, ‘I want to buy a building in Brookline,’” he said.
The recent spate of office openings has been equally strategic in their locations.
LandVest’s Boston agents had operated out of 10 Post Office Square in the Financial District for 25 years, an office choice dictated by the company’s roots as a commercial broker for timberland in northern New England, Anderson said. After securing a deal with Christies’ – LandVest is a founding affiliate of the auction house’s real estate brokerage arm – to be its exclusive affiliate in Boston, the company needed to broadcast the news to potential clients and potential agent recruits if it wanted to grow its share of the downtown luxury market, dominated in recent years by Campion & Co., Gibson Sotheby’s, Compass and Coldwell Banker.
“It’s about being top of mind, the brand recognition. A lot of people know us from our exceptional properties we sell in suburban or second home markets,” Anderson said, but who didn’t realize they were in Boston because they lacked a storefront office.
Offices Open into Uncertainty
These brokerage expansions are taking place as the entire real estate industry sails into uncharted waters. Stock market volatility is sapping some elite seller and buyer interest, while buyers and sellers on the lower end of luxury are caught in some of the same traps were more quotidian homeowners and homeowner-hopefuls find themselves.
“That luxury market, it completely revolves around the stock market. How much have they made in their portfolio? How much have they lost? Many are money managers, too, so how are their clients doing?” Gibson Sotheby’s Montero said.
With only around 100 active listings in Boston’s core neighborhoods right now with asking prices between $4 million and $6 million – excluding the 600 units in luxury towers expected to deliver this year – and another 100 at pricepoints above that, Montero said, the downtown luxury market’s slowness is palpable.
Among sellers and buyers for whom interest rates, and not cash, are king, Advisors Living’s McIntyre said, many buyers in their 50s and early 60s who might otherwise move are “harboring.”
“You have the 65-year-old taking an equity line to help their 35-year-old win a bidding war. Then you have the 55-year-olds saying, ‘Why would I move? I have 2,700 square feet, I have to pay more [per month] to move and I can’t get Junior to move out,” he said.
