Here's the latest installment of Bates By the Numbers, a weekly feature by Boston real estate agent David Bates that drills down into the Hub's housing market to uncover those trends and people you would not otherwise notice. Follow him on Twitter and check out his ebook, Context: Nine Key Condo Markets, 2.0.
How expensive is today's condo market?
One breakdown I did showed that four times as many Hub condo buyers paid more than $796 a square foot in 2014 than paid less than $327 a square foot. Let's see: At $796 a square foot, a modest-sized 1-BR (550 square feet) would run about $440,000; an economy-sized 2-BR (1,000 square feet) would go to the closing table at about $800,000, and a somewhat puny 3-BR (1,250 square feet) would set a buyer back a cool million. Sound expensive?
I broke down the first seven months of 2010's $400,000 condo sales to see how they compared to the 2014 results that I had found so surprising. The markets I surveyed included Boston, Brookline, Cambridge and Somerville.
In the first seven months of 2010, I found 1,501 condos that sold for more than $400,000. So I put the 1,501 sales into $10-per-square-foot ranges that had almost the identical amount of transactions (150 to 151 sales each). As a result of this breakdown, there were an equal amount of transactions in the lowest (under $327) and highest (over $796) dollar-per-square-foot ranges.
How did it compare to 2014? In the first seven months of 2014, I found a total of 2,394 $400K+ condo sales in those same Hub markets, representing an increase of nearly 900 transactions compared with 2010. I put the 2,394 condo sales that occurred in 2014 into the same $10-per-square-foot ranges that I had used for 2010, and immediately saw that despite the significant increase in total transactions some of the lower per-square-foot ranges had fewer sales in 2014 than in 2010.
For example, while 150 sales in 2010 garnered between $327 and $373 per square foot, I could find only 107 sales in that range in the first seven months of 2014. So, in other words, while the condo market's $400K transaction pie grew about 60 percent bigger, the $327-$373-per-square-foot slice got about 30 percent smaller. Hubba, hubba, that's one skinny slice of transaction pie!
Unlike some of the incredibly shrinking modestly priced per-square-foot ranges, the 2014 transaction counts in the higher per-square-feet ranges flourished. In fact, the five highest dollar-per-square-foot ranges have pretty much at least doubled their transaction counts, growing much faster than the market. The highest price-per-square-foot range more than tripled its transaction count, making the highest range—believe it or not—the most popular dollar per square foot range in the Hub.
· Our Bates By the Numbers [Curbed Boston]