Downtown condo sales drop 12%

Condominium sales for downtown Boston and adjacent neighborhoods such as the Back Bay and the South End fell 12 percent as the median selling price declined 4 percent to $454,500, according to a second-quarter sales summary issued yesterday by Listing Information Network, or Link.

But according to a broker specializing in the high end, prices continue to rise for many newly built condominiums priced at $1 million and up as affluent baby boomers look to move out of suburban homes and into the city.

``It was a tough quarter," said Link president Debra Taylor Blair. ``The market was so overheated between 2000 and 2005 that what we're seeing now is the market moderating."

Results suggest ``a soft landing rather than a crash," she said.

Blair expects a rebound because the number of condos for sale has dropped recently and because of strong demand for luxury condos.

According to Kevin J. Ahearn, president of Otis & Ahearn, a Boston brokerage, prices continue to rise 2 to 5 percent for many condominiums priced at $1 million or more. He noted that this year's second-quarter results faced tough comparisons to 2005.

A look at the data shows a market that's ``stronger than the perception," he said.

Undaunted by the state's stagnant population growth, developers are building more urban condos.

Working with Pam McKinney of Byrne McKinney & Associates, a real estate consulting firm, Ahearn just completed a market analysis that estimates that between 2004 and 2008, 3,979 condominiums will have been built in many Boston and East Cambridge neighborhoods; 60 percent have been purchased or reserved.

At the Residences at the InterContinental at 500 Atlantic Ave. in Boston, where prices range from $600,000 to $6 million plus, 80 of 130 condominiums are spoken for in a building that won't be ready for occupancy until the fall, Ahearn said.

McKinney and Ahearn included such so-called ``pre-sales" in their analysis. Developers of many big projects begin marketing, or ``pre-selling," their condos a year or two before they're built. Buyers can put down a deposit to reserve a condo but don't complete the sales transaction until later.

Link tracks only closed sales transactions so its reports don't include, for example, the more than $100 million in pre-sales at the InterContinental, said Ahearn, who added that his study shows that condominiums in the market's pre-sale segment are being ``comfortably absorbed."

Link, which tracks sales in such neighborhoods as downtown, Charlestown, the Fenway, the North End, and South Boston, reported that the number of condos sold during the second quarter was 1,048, down from 1,196 a year ago. The second-quarter median selling price for all neighborhoods that Link tracks was $454,500, down from $475,000.

Blair expects prices to rebound partly because the number of downtown condos for sale has fallen. In early June, 1,850 condos were listed for sale; as of last week, that number had fallen to 1,663, she said.

Statewide, the monthly volume of condo sales in June fell 14.3 percent and the median condo selling price was $283,500, down 1.1 percent, according to the Massachusetts Association of Realtors.

June's monthly sales for single-family homes fell 16.6 percent, and the median selling price was $370,000, down 1 percent. After several years of growth, sales have slowed as mortgage rates have mostly risen nationwide.

Chris Reidy can be reached at reidy@globe.com.