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.
In recent weeks, Curbed Boston readers have expressed increasing frustration about the lack of condominium inventory in the Hub. Even though I have been writing about the area's incredibly shrinking condo supply for almost as long as I have been writing for this blog, it was these outbursts that finally provoked me to look at the Hub's future condo inventory to see if there was any light at the end of the tunnel.
Nick Martin, communications director for the Boston Redevelopment Authority, told me over email that of the nearly 8,000 housing units currently under construction in the city, only 1,503 units had been declared by developers as condos. Almost all the rest are considered apartments.
It shouldn't come as a surprise to anyone familiar with the Hub's real estate market that many of the 1,503 condos under construction have already been spoken for. Of the 422 units classified as under-construction at Millennium Tower, for instance, more than 300 may have already found buyers; of the 83 condos under-construction at the Sepia in the South End, 82 are said to be under agreement; and of the 109 under-construction at Twenty Two Liberty in the Seaport, a lot have been pre-sold.
So, after scrutinizing only three of the 100 condominium projects that accounted for the total amount of Boston condos under construction, I had already re-classified about one-third of Boston's "under-construction condos" as "under-agreement condos." Yet, it was entirely possible that an even a larger percentage of Boston's under-construction condos had found buyers. One person familiar with the sales pace of new construction told me, "Even the smaller condo projects in the South Boston market are having very good success pre-selling their units."
Most of Sepia Boston's Future Condos Have Now Sold [Curbed Boston]
Millennium Tower 70 Percent Sold, Mostly to Local Buyers [Curbed Boston]
Unfortunately, there's another reason why the 1,503 condos under construction in Boston might not have much of an impact in alleviating the lack of supply in the near future. That's because unless a project is well on its way construction-wise right now, it won't deliver in the next 12 to 18 months. Brad Horner of the Raveis Marketing Group*, who is familiar with every residential construction project in the city and whose team markets larger projects, told me that this is precisely why he doesn't expect Boston's tight inventory conditions to change much in the next 12 to 18 months. "I think in two years it's going to be a different story," he added optimistically.
Outside of Boston, the condo-inventory picture is similarly dire. George Proakis, Somerville's planning director, told me the city needs to build 9,000 housing units by 2030, but "probably less" than 100 new condos will be delivered there in the next 12 months. Proakis also told me that in recent years the hipster haven has beared witness to an unusual trend: permitted condo developments becoming apartment projects. This happened with Maxwell Green and also more recently when one buyer decided to buy a 16-unit condo development that was under construction on Linden Street.
Alison Steinfeld, Brookline's planning director, told me there are no condo developments currently under construction in the town. There are not even any apartments under construction in North Brookline. In fact, Steinfeld said that Brookline would prefer commercial development over apartment or condo because it would not burden the school system.
*Disclosure: RMG is a division of the brokerage I work at.
· Our Bates By the Numbers archive [Curbed Boston]