While the national real estate market has bounced all around the map, mainly in a downward direction, Boston proper has remained a relatively steady real estate market. There are certain neighborhoods within Boston that have actually shown signs of appreciation, some have stayed flat, and still others that have shown signs of depreciation, but all in all, the downtown Boston real estate market has stayed relatively steady over the course of the past several years.
While some Boston neighborhoods are staying relatively flat, South End condos have shown some backward steps at different levels, including both average and median price points. It’s important to consider both median and average prices when looking at Boston real estate market statistics because averages can be pulled significantly one way or the other with only a small number of outlying data points, thus, the combination of the two statistics will provide a more comprehensive view of the market.
According to the Boston MLS, Boston’s South End is one neighborhood that has stayed relatively flat over the past year, but has showed signs of slowing down on various fronts. For instance, during the first 3 months of 2008, 82 properties in the South End were sold, while in 2009, the market velocity in the South End has slowed to 36 properties sold. This represents an approximate 36% slowdown in the number of units that sold during the same period in 2008 and 2009. 2008 South End median condo price, as well as average price, were $550,000 and $641,473 respectively, where in 2009 thus far, we see $518,500 and $609,936, roughly a 5-6% decline. Still, condos in the South End’s best locations are performing well (see South End Condos for Sale).
Tighter lending practices in 2009, which are beginning to loosen, could be the main culprit for the slowdown in the number of units sold, bearing in mind that this particular statistic lags the market given that the average time to close on a condo in Boston is anywhere from 30-60 days (that said, condos that are showing sold in the first quarter of 2009 were actually being put under agreement in December 2008 and January 2009, when lending was significantly tighter than what it is currently). As for prices, perhaps this is a function of supply and demand market forces. The supply of homes has decreased, yet the demand from buyers who actually can qualify and make a purchase has decreased much more, until these forces can level off, which we are starting to see, it’s no wonder that a decline in the 5% range is present.