Following Year Ago Surge in High-End New Dev Closings, Prices and Sales Trends Stabilize

Douglas Elliman Real Estate, the largest brokerage in the New York Metropolitan area and the second largest independent residential real estate brokerage in the United States by sales volume, has today released the Q1 2019 Market Report for Downtown Boston. The report covers condo sales in the Back Bay, Beacon Hill, Charleston, Fenway, Midtown, North End, Seaport, South Boston, South End, and West End neighborhoods, and townhouses sales throughout Downtown Boston. The report showed distorted trends in the current condo market following an unusual year-ago surge in high-end new development legacy closings (contracts signed 2-4 years earlier). Taking this into consideration, price and sales trends showed stability in the first quarter of 2019, which was more typical than Q1 2018.

“This quarter is unfairly compared to the one we experienced a year ago, which was a period of excess legacy contract activity,” said Scott Elwell, Senior Executive Regional Manager of Westchester and New England at Douglas Elliman. “The legacy closings in the first quarter of 2018 significantly skewed the market trends year-over-year, causing record prices for the overall condo and luxury condo markets as well as heaviest sales volume for a first quarter in thirteen years.”

Townhouse sales in Boston showed a heavy sales volume and a decline in listing inventory year-over-year for the second straight quarter.

“While the published report does include the condo legacy closings from a year ago, we also looked at a comparison that removed three buildings that showed either a high volume of these contracts, or record pricing,” said Jonathan Miller, of Miller Samuel Inc., the author of the report. “This resulted in a more representative trend in comparison to the first quarter of 2019 that did not see the same surge in legacy closings. Results were more normal in the townhouse segment of the market, where we saw mixed price trends, but an uptick in sales volume and two of the three price trend indicators moved higher year-over-year.”

DOWNTOWN BOSTON SALES HIGHLIGHTS

Overview

CONDO

“Price and sales trends showed stability after considering the year-ago surge legacy contract closings.”

*A year-ago, record prices and heavy sales volume were caused by an unusual surge in high-end new development legacy closings, i.e. contracts signed 2-4 years earlier that distorted current trends. Q1-2018 closings were the highest first quarter number of sales in 13 years; Average and median sales price were skewed to all-time records; average price per square foot was second highest on record. By the removal of three buildings with either a high volume of legacy contract closings or record pricing: 50 Liberty (49), Pierce Boston (58) and 10 Farnsworth (6) resulted in a more representative trend in comparison to the first quarter of 2019 that did not see the same surge in legacy closings. The published report does include the legacy closings.

-The removal of three buildings with a high concentration of legacy closing resulted in a modest year over year price per square foot increase sales

-Negotiability tightened from year-ago levels as marketing time expanded

TOWNHOUSE

“Despite mixed price trends, sales moved higher as inventory declined.”

- Number of sales increased year over year for three of the past four quarters

- Listing inventory declined year over year for the second straight quarter

- Marketing time and negotiability expanded sign

Key Trend Metrics (compared to same year ago period)

CONDO (all sales)

- Median sales price declined 13.8% to $810,000

- Price per square foot decreased 10.4% to $984

- Average sales price declined 18% to $1,126,556

- Number of sales declined 22.8% to 487

- Listing inventory increased 32.9% to 460

*CONDO (removal of sales in three buildings with heavy legacy contract closings)

- Median sales price declined 1% to $810,000

- Price per square foot increased 3% to $984

- Average sales price declined 3.1% to $1,126,556

- Number of sales declined 6% to 487

TOWNHOUSE

- Median sales price jumped 30.1% to $1,350,000

- Price per square foot slipped 1.9% to $717

- Average sales price rose 3.8% to $1,734,280

- Number of sales rose 22.2% to 66

- Listing inventory fell 2.8% to 35

About Douglas Elliman Real Estate

Established in 1911, Douglas Elliman Real Estate is the largest brokerage in the New York Metropolitan area and the second largest independent residential real estate brokerage in the United States by sales volume. With more than 7,000 agents, the company operates approximately 118 offices in New York City, Long Island, The Hamptons, Westchester, Connecticut, New Jersey, Florida, California, Colorado and Massachusetts. Moreover, Douglas Elliman has a strategic global alliance with London-based Knight Frank Residential for business in the worldwide luxury markets spanning 60 countries and six continents. The company also controls a portfolio of real estate services including Douglas Elliman Development Marketing, Douglas Elliman Property Management and Douglas Elliman Commercial. For more information on Douglas Elliman as well as expert commentary on emerging trends in the real estate industry, please visit elliman.com.