Luxury condo prices take a hit
We all knew this was coming, the question was when.
Downtown Boston’s luxury condo market is finally starting to come back to earth after defying gravity – and a severe housing and economic downturn – for two years.
The Globe reports the median sale price of luxury condos plunged 19 percent in the first quarter, compared to the first three months of 2008. Overall sales are down 42 percent.
In a reversal of some long standing trends, that is actually worse than the condo market as a whole, which saw median prices fall by 14 percent and sales by 33 percent.
It’s pretty clear the housing downturn, even as it appears to be hitting bottom, is also shifting gears.
The first two years took a heavy toll on condo and home buyers at the margins, folks who stretched to buy when they should not have with the help of crazy subprime loans.
But now we are starting to see upper income professionals take a hit as the recession takes a bite out of high-paying industries like financial services. These were the folks who were paying out the big bucks for these luxury units, and now there are simply fewer of them around to keep the downtown condo party rolling.
What’s happening here, of course, is being mirrored across the country, with luxury sales falling as the pain from the economic downturn spreads.
Condo sales in Manhattan are off dramatically, while home prices in the Hamptons plunged 23 percent in the first quarter.
So all you luxury condo cheerleaders out there, welcome to the real estate downturn.
