Don’t look now, but those already crazy downtown Boston condo prices are about to go completely bonkers.

There are just a handful of unsold condos left in the bevy of new luxury towers built during the bubble years, with the pickings scarce as well at some of Boston’s older and long-established condo addresses, PrimeTime Communities finds in a new report.

And the dearth of condos on the market is poised to send already sky-high Boston prices into the stratosphere, the Littleton-based condo marketing and consulting firm reports.

The average Boston residential price could cross the $855,000 mark by the end of the 2014, the consulting and marketing firm notes, predicting another year of torrid, double-digit appreciation, PrimeTime predicts.

“Sales continue to rise, prices are way up, and listings continue to drop, and new for-sale permits can’t increase fast enough,” writes PrimeTime co-founder Tom Skahen. “If you are a buyer, the American dream is becoming a nightmare.”

In fact, condo prices in affluent neighborhoods like the Back Bay, South End and Beacon Hill have bolted out of the gate during the first two months of the year, luxury market tracker Otis & Ahearn reports.

Chew on this stunner: More than 30 percent of all downtown condo sales during the first two months of year were for a startling $1 million and up. That’s roughly double last year’s pace, according to new stats released by luxury market tracker Otis & Ahearn.

Low Supply

Meanwhile, the number of unsold listings on the market amounts to a mere month and a half of supply. That’s far below the six months needed for a balanced market.

“We are seeing increasing action on the high end and more of it, and upward pressure on pricing,” said Kevin Ahearn, president of Otis & Ahearn.

Sure, a good part of the demand is organic. The stock market is rolling and the well-off are benefiting handsomely from the budding economic recovery, with lots of cash to put into fancy new downtown condos.

But more than just demand is at work, with a looming shortage of luxury condos applying another layer of intense upward pressure on top of that.

There is a grand total of 21 condos left to be sold at the five largest luxury towers that opened their doors in downtown Boston over the past few years, namely 45 Province Street, Millennium Place, W Boston, The Clarendon, and the Macallen Building, according to PrimeTime.

Overall, the number of downtown Boston condos on the market, once you add in other, somewhat older buildings like the Ritz-Carlton towers, add up to just 187.
That’s down from just 964 in 2007, the PrimeTime report finds.

Downtown condos are staying on the market just 46 days, selling faster than at any point in the past decade.

Meanwhile, Millennium’s new condo tower on Washington Street won’t help matters, with its 256 units mostly spoken for. Yes, there’s the new condo tower over at Fan Pier, but except for some smaller projects, that’s about it for the next two or three years, at least until the Filene’s tower and its condos finally come online.

“We don’t have any net new additions to inventory,” Ahearn said. “The 256 units at Millennium Place added zero.”

So let’s face it, buyers are going to take it on the chin over the next few years, not just downtown, but beyond as the mismatch between supply and demand trickles down the income ladder.

Yet there’s a silver lining here for developers with the flexibility and foresight needed to shift gears.

After all, massive price appreciation will mean some potentially rich development opportunities for developers who can snag sites and battle their way through the Boston permitting gauntlet.

And in some cases, it might not even be necessary to build a new tower, but to simply change the shingle outside one of these shiny new luxury towers from “for rent” to “for sale.”

There are nearly 10,000 new apartment units in the planning pipeline right now in the Boston area, compared to maybe several hundred new condo units.
Maybe it’s time for some would-be luxury rental tower developers to consider changing teams, Ahearn argues.

“If you’re a developer, you may want to rethink your strategy,” Ahearn writes. “You have a lot of options. Convert those rental plans to condo. Those rental projects are filling up fast, but so is the pipeline.”

Scott Van Voorhis can be reached at sbvanvoorhis@hotmail.com.