The Boston Upscale and Luxury Condo Market had a Strong 2016.
Sales volume in the Boston Upscale and Luxury condo market in 2016 was up 7% with the average price up 20% to $1,150,000. An unseasonably high fourth quarter 2015 can be attributed to the closing of 22 Liberty, while the third and fourth quarters 2016 benefited from the closing of Millennium Tower. Overall, when comparing fourth quarter 2015 and 2016 absolute prices remained fairly flat, with fewer transactions happening in 2016 because a majority of the Millennium Tower sales happened in third quarter versus fourth quarter 2016. We define the Upscale market as condos $700/SF+, $500,000+, 4+ units, and central AC in the building, while Luxury is the top 10% of the market. Even though the average price per square foot may be 6% below the end of last year average PPSF, it is still 5% higher than the next highest quarter. As condo prices continue to go up, many buildings that did not qualify as “Upscale” in 2015 do now, as they are now trading higher than $700/SF and $500,000, further showing that pricing along all residential segments is up.
Neighborhood Supply Low and Demand High. When observing all Boston markets, there is still a shortage of supply in all neighborhoods. Market equilibrium is typically defined as 6 months of available inventory. Very few large residential projects are delivering in 2017, but those that are, are 40%+ sold out. The two largest buildings delivering in 2017, Pierce (The Fenway) and 50 Liberty (Seaport), are both 40-50% sold out as of the end of 2016. A few other projects slated to be delivered this year are Siena (South End), 110 Broad (Financial District) and Telford 180 (Brighton) are also selling fast. Sales offices for LoveJoy Wharf (Waterfront, near North Station) with plans to capture some of the pent up demand in the “Upscale” market for homes located on the water but with no parking in the building offered. Back Bay continues to go strong with One Dalton condos selling at record high selling prices with a new high watermark on price per square foot as well.
What’s Hot? By the end of 2016, the main three condo types (1, 2 and 3 bedrooms) in the upscale and luxury markets all saw big jumps in asking prices. Both one and two bedroom condos saw the largest jump at approximately a $100,000 increase to average asking prices, bringing them up to $1.1 million and $1.9 million, respectively. Three bedrooms saw the largest sales to ask spread of three condo types, but still achieved an average sales price over $3 million.
Overall, 2017 looks to be an exciting year in the Boston real estate market, with prices only expected to continue to rise in a supply constrained market.
While we have been settling into the first few days of 2017, the residential real estate market has hit the ground running. Housing market trends throughout the Boston area show a 3% rise each year in median sales prices and a 2% rise in median rent per month. With the rents down from previous years, it looks like 2017 will be a profitable and exciting time to move to a new home. Over the past six months, rising home prices in the Boston area have acted as a catalyst to improve the buying power of people selling their homes, allowing sellers to stretch their money further when they look to purchase a new home.
This urgency to buy and sell is indicative of a strong economy in a great city. As the home to multiple top-notch universities and thriving companies, Boston and the surrounding areas benefit from a community and a culture that prides itself on ingenuity and innovation. The current confidence demonstrated by buyers and sellers has boosted the outlook for a strong residential real estate market in 2017.
What does The Federal Reserve Increase on Wednesday, December 14 mean for you?
On Wednesday, December 14th, the Federal Reserve raised the federal funds rate by 25 basis points from 0.5% to 0.75%. The confidence in the U.S. economy was caused by a strengthening labor market, a low rate of unemployment only expected to go further down in 2017, and inflation moving rapidly toward targeted levels. This is only the second time in the past decade that this has happened. It is anticipated by the Fed that there will be three rate hikes in 2017 instead of two, a change that reflects their increased anticipation of a strong U.S. market.
According to Fed Chairman Janet Yellen, “Our decision to raise rates should certainly be understood as a reflection of the confidence we have in the progress the economy has made and that it is expected to make.”
So what does this mean for potential home-buyers in Massachusetts, or really throughout the U.S.?
Now is the time to buy. Mortgage interest rates are still very low, but with this announcement and other increases predicted for 2017, your buying power as a consumer of real estate is only going to go down as the Mortgage rate goes up.
For example, the cost to finance $500,000 (before this announcement, 30-year fixed, 4.35%) was approximately $2,486 per month principle and interest. Since the rate increase on Wed. the average % has moved to 4.45% giving a buyer a cost of approximately $2,519 per month principle and interest. An increase of approximately $33 per month or $396 per year. With three more interest rate increases expected in 2017, one can expect these small bumps in the mortgages rates to add up to a bigger monthly cost number. If you can, buying now make “cents”.
Advisors Living is pleased to introduce our newest exclusive listing. This luxury new construction contemporary single family home is located at 175 K Street in South Boston. Designed by the local and talented architectural firm Embarc Studio, this home was built to offer a multi-level contemporary and luxurious lifestyle while maintaining the much sought after and often over looked traditional layout. The transitional finishes embody a pronounced elegance and sophisticated design, culminated by an exceptional use of material and craftsmanship.
THE SUBSTANTIAL FOUR BEDROOM HOME is remarkable in nature with its open concept and impeccable custom design. The abundant oversized Marvin integrity windows and the 10’ ceiling heights throughout offer a natural rhythm shared with the exterior, a design that prioritizes quality of light and use of space.
THE PROFESSIONAL CHEF’S KITCHEN features Jenn-Air stainless steel appliances. The custom painted light grey, beaded edged maple cabinets are accented by the Quartz Artic white honed counters which present clean and modern lines.
The build and layout exceeds by including a wonderful living room accented by a centered modern gas fireplace and a well-positioned separate dining area that fills with natural light via exceptional window placement.
Advisors Living recently completed the sell out of 42 market-rate condominiums at the Mosaic on the Riverway. Closing prices averaged nearly $1,000 per square foot. Below is an excerpt from Curbed Boston’s coverage on the new development success:
In October 2015, sales at Mission Hill’s under-construction Mosaic on the Riverway residential complex got underway. Some 85 of the 10-story building’s 145 units were slated as condos, with 42 of them market-rate and the rest below-market-rate (the remaining 60 units are designated as affordable rentals).
All 85 Mosaic condos have traded and closings have started.
As of Oct. 5, 11 condos have closed at an average price of $928 per square foot, according to Bldup.com. That is a not-insignificant sum for the neighborhood, but not all that high by new-development standards in present-day Boston.
The Boston Planning & Development Agency (BPDA) just approved a new 5-story condo building at 545 East Third Street in South Boston. Designed by Souza Architects, the building will include 18 condominiums, a 22-car ground-floor parking garage and on-site gym.
The $8.5 million project, developed by South Boston’s Cedarwood Development, is situated on the corner of East Third and K Street. 545 East Third Street is conveniently located just one block from Stop & Shop and two blocks from an MBTA bus stop with direct access to Downtown Boston.
545 East Third Street is also located a few blocks from local Southie restaurants including Paramount (longtime winner of Boston Magazine‘s Best Brunch), Tasty Burger and Boston Beer Garden.
Looking to buy or rent in South Boston? Email us today and one of our neighborhood experts will help you find the perfect home.
Brendon Properties and Advisors Living were the proud recipients of eight prestigious PRISM awards at The Builders and Remodelers Association of Greater Boston’s (BRAGB) annual flagship gala on October 6th at the Boston Park Plaza Hotel.
Brendon Properties was recognized for excellence in building construction and design for two of their Signature Communities, Montage at Danforth Green in Framingham, MA and River Trail Place in Wayland, MA. Advisors Living is the exclusive sales and marketing firm for both communities.
Gold PRISM Award – Best Detached Home Under 2,500 Square Feet
The Hayden at Montage was the fastest selling plan in the community, appealing to both young families as well as early empty nesters.
Gold PRISM Award – Best Special/Limited Time Marketing Promotion
The marketing campaign promoting the Montage Grand Opening created quite a Buzzzzz. Over 500 people attending the weekend-long event which included a champagne toast and ribbon cutting on Friday, Friends and Family Breakfast on Saturday and finally a Block Party on Sunday afternoon. Advisors Living implemented a fully-integrated print and digital advertising campaign to promote the event.
Silver PRISM Award – Best Attached Home Under 1,800 Square Feet
The Monet at Montage has been an extremely popular plan for first-time buyers and snow birds looking for smaller, efficient home perfect for seasonal living.
Silver PRISM Award – Best Multi-Unit For-Sale Community Attached Homes
Silver PRISM Award – Best Print Brochure
Advisors Living worked with Doerr Associates to create the brochure for Montage. With 7 different home styles, 5 detached and 2 attached, Montage was positioned as an offering of condominium homes in a village setting.
Silver PRISM Award – Team of the Year – Alison Miceli, Lorraine Murray & Gail Carter
The Montage Sales Team formally launched sales for the community of 176 homes in late spring, 2015. In just 12 months they sold 117 homes! As of October 2016, there are only 23 homes available at Montage.
Silver PRISM Award – Most Valuable Team Member: Jennifer Wilson
As the Online Sales Concierge for Montage, Jennifer embraced a new role in our company and taken it to an entirely exponential level.
Silver PRISM Award– Sales Person of the Year – Gina Sanginario, Sales Director, River Trail Place
Gina led the successful sell out of River Trail Place. In just 17 months she sold all 42 homes totaling $32.7 million in sales.
Congratulations to Brendon Properties and the Advisors Living team!
The scenic town of Swampscott, which spans just 2-square miles, is one of Boston’s most sought-after suburbs attracting young professionals, families and empty nesters. Due to the limited availability of land in this coastal town, there is very little new development in Swampscott. The majority of housing in this affluent community remains single-family homes. Median price of homes currently listed in Swampscott is $649,450. However, two new development projects offer great alternatives for buyers and renters looking to live in this premier North Shore community.
Thinking about buying in the North Shore? Contact an Advisors Living expert today!
Avery at Swampscott
This new construction 3 building community will offer 42 two-bedroom condominium homes. Located at 443 Essex Street, Avery at Swampscott is just 1.5 miles from the beach and less than 1 mile from the Swampscott Commuter Rail. The community is ideal for commuters with Downtown Boston and North Station only 4 stops away.
Hanover Vinnin Square
Now available for move-in, Hanover Vinnin Square is a 184-unit luxury apartment community in the heart of town. Offering both two bedroom and three bedroom homes, the community is fully equipped with premium amenities including state-of-the-art fitness center, swimming pool, screening room and common outdoor area with grill and fireplace.
New renderings of the development One Charlestown have been released after being proposed to the Boston Planning and Development Agency.
The project will cost $1 billion and will transform what is currently a housing development into a mixed-use, mixed-income neighborhood.
The proposal includes 3,200 units and 13 blocks of apartment buildings that are waiting to be approved.
The development will be made up of a number of buildings with a mix of apartments and condos, ranging from six to 21-stories tall. Each building will have a tree-filled courtyard, retail shops throughout and single-story parking garages under each block.
The buildings’ designs have been carefully constructed by different architects to give them each a friendly and unique look.
Developments also include the addition of two new parks to the neighborhood.
Check back to find out more details about when One Charlestown will be constructed and any developments within the project.
Contact our advisors for more information or to learn more about all new developments throughout Boston.