Here is the latest installment of Bates By the Numbers, a weekly feature by broker David Bates that drills down into the Hub's housing market to uncover those trends you would not otherwise see. This week, he looks at the top of the higher-end condo market. (Last week, he showed just how many condos were going at or over asking.)
Ice cream has super-premium. Airlines have first class? And the condominium market has an "ultra" market segment. Ultra condominiums are the downtown properties that offer the best in terms of quality, location and services; and I define "ultra" further as those Boston condos that have an asking price in excess of $3,000,000. How's this high-end market niche doing in an economy that still feels a bit iffy? Put simply, it's as hot as it is expensive.
Between Jan. 1 and March 15, 15 Boston condominiums with list prices in excess of $3,000,000 went under agreement. That's up from six under-agreements in the same period last year, a 150 percent increase. Since 2005, only one other Boston condominium market has had even double-digit under-agreements in the first two and a half months of the year (2008: 12).
While Back Bay and Beacon Hill get the lion's share of ultra sales, the hunger for $3M-plus listings has seeped into the South End. While only one unit shows up in MLS as under-agreement at the South End development known as Chevron on Tremont (518 Tremont Street), the new five-unit development has completely sold out. All five condos had listing prices over $3M and all five are under agreement. In comparative terms, from 2008 to 2012, MLS reports show the entire South End condo market produced only a total of four condo sales in excess of $3,000,000. Let me give you that score again:
Chevron on Tremont: 5 in a few months
South End Condo Market: 4 in five years
Obviously, 2013 is a good "ultra" market in the South End and, since it is only March, this key Boston neighborhood will likely see more $3M-plus deals before the year is over.
We learned that a Saudi sheikh bought the Ames-Webster Mansion, but who's buying the Hub's ultra condos? It's not always easy to see who the owner is because many buyers put the properties in a trust rather than in their name. However, I did find the names of three recent ultra buyers, so I googled them. Here's what I found out:
· The buyer of a $3M condo in Midtown is described as someone with 35 years of financial investment experience.
· The new owner of a Back Bay condo which sold in excess of $3.7M has a technology investment background and has been a private investor since 1996.
· The buyer of a 2,500-square-foot condo that sold for in excess of $3.9M is described as "a private investor" who spent more than a decade as a portfolio manager at Fidelity.
I'm getting the feeling that the better the stock market does, the better the ultra condo market will do. Go, stock market, go!
In a real estate year for the ages, Boston's $5M-plus club might be the only market that is outperforming the ultra market. Since the first of the year, six under-agreement Boston condos joined that club. That's up from two under-agreements in the same period last year, a 200 percent increase.
· Boston's Most Expensive Home Sale Ever! [Curbed Boston]
· Our Bates By the Numbers archive [Curbed Boston]