iStock photo
No real estate market is bulletproof. And the condominium market in downtown Boston, dominated as it is by multimillion-dollar luxury sales, is no exception.
So far 2023 has proven to be a rough year for real estate, with surging interest rates having taken a huge bite out of both condo and home sales in the Boston area and across the country.
The prices of the Earth’s luxury homes and condos edged down 0.4 percent in the first quarter, according to real estate consulting firm Knight Frank.
The failure of two big banks that catered to wealthy Greater Bostonians hasn’t helped either.
First Republic, in particular, built a thriving local business offering outsized jumbo mortgages to their well-off clientele, which included a who’s who of the Boston area’s development sector.
And the latest numbers from The Warren Group, publisher of Banker & Tradesman, show that the turmoil in the banking sector and the economy appears to have caught up with the condo market in downtown Boston.
The “downtown core” market – defined as Beacon Hill, Downtown Crossing, Back Bay, the South End and the Fenway – saw just a shade under 400 condo sales during the first four months of 2023.
That’s a big drop from the same period last year, when 549 downtown condos changed hands.
The Seaport, with its bevy of new, luxury residential towers, and South Boston, which has seen its high-end development surge, saw an even bigger drop, with just 99 condo sales combined through the end of April, compared to 216 last year and 198 in pre-pandemic 2019.
Condo sales in Newton fell by a third, while Cambridge and Brookline also saw more modest, but still noticeable drops as well, the Warren Group numbers show.
Yet, guess what? Condo prices in all these high-end markets either rose or held steady, even amidst all the turmoil in the banking sector and the economy.
Median prices in downtown Boston rose, albeit slightly, to $1 million, up from $985,000 during the first four months of 2022.
Big Deals Boost Prices
Helping boost that median price were a couple big deals, one at the posh new One Dalton/Four Seasons tower, the other at the old and also very luxurious Four Seasons on Boylston St.
Michael Carucci, a top luxury agent at Gibson Sotheby’s International Realty in Boston, noted the $18 million sale his team closed at One Dalton was one of the city’s largest in the last few years.
Carucci was also the listing agent in the sale of auto magnate Herb Chambers’ $12.5 million condo in the old Four Seasons, overlooking the Public Garden.
“Volume has flattened out a bit but we have not seen any significant price reductions,” Carucci said.
The median price in Cambridge was up a not insignificant $125,000 year to date through April, hitting $975,000.
Newton and the Seaport/South Boston both saw prices edge up by $10,000 to $15,000, hitting $914,000 and $858,000, respectively.
Meanwhile, there has been a flurry of sales at new condo towers and high-rises that have either recently opened or are preparing to open their doors.
A search of real estate records compiled by The Warren Group turned up at least 30 sales so far in 2023 in new deluxe condo projects downtown.
Scott Van Voorhis
The 314-unit Winthrop Center skyscraper has seen 10 such deals in the neighborhood of $1 million to $5 million, with another 89 of (slightly cheaper) sales at the new 168-unit Parker tower at 55 LaGrange St., among others. Seventeen units at the 114-unit St. Regis Residences in the Seaport, including the $9.4 million Unit 16E have been bought up, too.
So, the downtown Boston condo market may not be invincible. But with prices rising even as sales fall, it’s clearly one tough nut to crack.
Scott Van Voorhis is Banker & Tradesman’s columnist; opinions expressed are his own. He may be reached at sbvanvoorhis@hotmail.com.
Correction May 16, 2023: An earlier version of this story misstated the number of units sold at the 55 LaGrange St. tower. That number is 89 through May 10, 2023.
