The Emergence of Boston’s $2,500+ PSF Condo Market
In 2019, approximately 2% of Boston condos achieved net sale prices at or above $2,500 per square foot. This is a significant increase over 2018 where the percentage was 0.6%. In gross numbers, the sales jumped from 20 sales in 2018 to 62 total sales in 2019. Closings at new ultra-luxury condominium buildings were the biggest contributor, with One Dalton adding 35 sales $2,500+ psf and Pier 4 contributing 10.
In 2018, 11 of the 20 sales $2,500+ psf were re-sales in existing buildings, while in 2019 there were 17 sales in existing buildings achieving this new high water mark. The re-sales for 2019 at $2,500+ psf were concentrated in Back Bay and Beacon Hill, with one sale each in Midtown and South End.
Midtown has produced 9 sales $2,500+ psf to date, all at Millennium Tower, but in 2019 it only contributed 1 sale. Fenway has achieved 4 sales $1900+ psf (all at Pierce Boston), but to date no sales above $2,000 psf. And, although Waterfront was one of the first neighborhoods to show traction for sales $1,000+ psf in the early 2000s, it has yet to produce a sale $2,500+ psf (though it did have 2 in the $2,300- $2,400 range in 2019).
The Future of $2,500+ PSF Sales
In 2020, we expect a few more sales at One Dalton and Pier 4 to record $2,500+ psf, some sales from the new Archer Residences in Beacon Hill, and perhaps a few from the new Echelon in the Seaport. However, the next large bump in sales activity $2,500+ psf likely will not show up in the data until sales at St. Regis Residences Boston begin to record in 2021. We also expect to see an expansion on where sales $2,500+ psf are found. The North End/Waterfront area will likely begin to contribute some sales $2,500+ psf with the new condominiums now pre-selling at The Sudbury (site of the former Government Center Garage). By 2021 and 2022, it’s possible that upwards of 5% of Boston condo sales will be achieving prices at a level of $2,500+ psf.
How quickly a $2,500+ psf market will expand in Boston is still to be determined. Looking back, it took the $1,000+ psf market almost 10 years to carve out a significant market niche. In 2005, only 2% of Boston condo sales achieved $1,000+ psf. Ten years later, the 2015 Boston condo market recorded 20% of its sales $1,000+ psf. And last year, the 2019 condo sales in Boston recorded 45% of its sales at $1,000+ psf. What was once considered rarefied air just 15 years ago is now considered rather commonplace in Boston condo numbers.
*The downtown Boston market includes the following neighborhoods: Back Bay, Beacon Hill, Charlestown, Fenway, Midtown, North End, Seaport, South Boston, South End, Waterfront, and West End.