It’s early to say what effect the covid-19 pandemic will have on Boston’s condominium market, but here’s what we do know:
- Sales transactions are down (in most neighborhoods, but not all), but so is inventory (except for the places where it’s up)
- Days on market are up (except for the few neighborhoods where it’s down), but average asking prices are, too (but not in all neighborhoods)
All in all, there are pockets of continued momentum and there are pockets of interruption. Some of the continued momentum is driven by low rates, high rents, and the demands of life moving people in new directions regardless of pandemics. Surely some of the stagnation is caused by fears over where the economy is or might be headed, but some is simply caused by the inability of real estate agents or prospective buyers to enter condominium buildings.
In some cases, reduced inventory plays a part in the number of reduced contracts. While in other cases, fewer contracts could be the result of higher asking prices compared to last year.
A comparison of the Boston condominium market from March 1st to April 22nd this year versus last year reveals each neighborhood is having its own reaction.
- Beacon Hill inventory is down 13% from this time period last year and contracts are down 78%, yet prices for available listings are up 2% compared to last year.
- South Boston under agreement stats are off -48%, but its inventory is only off -10%. Yet, the average asking price for available listings is up 11% compared to last year. A combination of higher prices, reduced inventory, and more challenges involved in showing available properties may all be contributing to reduced contracts over the last 30-45 days.
- In the South End, under agreement activity was down 35%; however the listings that went under agreement had an average of 16% faster selling time compared to last year’s average days on market. In addition, the list price for these units going to contract this year were averaging 3% higher than last year (still TBD what these final sale prices will be).
- In Back Bay, the number of available condo inventory is down 27% compared to last year at this time. For what is available, average prices are up 12% higher than those for sale last year, and the days on market is averaging 2 days fewer than last year. Meanwhile, the number of condos going to contract is -62% off last year’s rate.
- The days on market for condos in Charlestown is actually down this year compared to March and April last year (average 48 this year vs. 53 in 2019). With inventory down 52% compared to last year, Charlestown also had a 43% drop in condos going under agreement. The quicker days on market may also be encouraged by the lower average price for the condos that are on the market. Available inventory this year is 8% lower than last year. However, we aren’t seeing many price drops for the current stock. Of the 21 units for sale, 30% did show price drops, but it’s important to note 3 of those 7 showing a price reduction were originally listed in 2019. For the other 3 showing price reductions, the drops range from 2-5%.
- Midtown has suffered more of an impact from the new restrictions than some other neighborhoods due to its higher percentage of high rises, and many of the high-rises have banned access into the buildings for any non-residents. Inevitably, this has slowed transactions in the neighborhood. Inventory has been reduced by 44% compared with last year and days on market has increased by 55%. Contracts were down 48%, but the average price of condos available this year is 23% higher than last year.
It’s clear there are still serious buyers and sellers in the market. There are also still bidding wars in some niche parts of the market. However, deals are often harder to put together. Transactions can take longer to put together with the new steps added to the process and restrictions put in place by health advisors and condo associations (and the additional restrictions put in place by some sellers and/or brokers). Ultimately, these factors have an impact in the number of transactions. But overall, we remain cautiously optimistic that the strength of the Boston condo market will endure well. New records were set across many statistical indicators in 1Q 2020 and, so far, the pandemic has caused more of a slowdown in transactions than a reduction in values. Time will tell, but the early signs are encouraging.