The downtown condo market - battered but not dead yet

In all seriousness, what signs are there that the economy and real estate markets are picking up? Every single sign I see points negative. Yes, the stock market is up because the stock market is up (note the circular reasoning?) (in many metrics its starting to resemble the internet bubble).

All other economic indicators are below dismal, despite the fact that the average journalist can't seem to tell the difference between a declining rate of decline, and an actual upturn. Hint - less bad news does not actually equal good news...

Despite all the gloom & doom that the financial press is pumping out, the condo market in the downtown city center is actually going just fine. Downtown has proven itself to be essentially unaffected by the recession. Prices in the finer neighborhoods are stable or rising. Sales are somewhat moderated due to lack of inventory, but I'm absolutely thrilled with all this new product coming online.

Realize that developers at large projects such as these have a multi-year timeframe when selling. Nobody ever expected these places to be 100% sold on opening day. A typical horizon is three to four years, give or take and developers are budgeted accordingly. I havet absolutely NO doubt in my mind that it is not going to take that long for the market to absorb these units.

Recession or no recession, one thing remains true: downtown living is where its at these days. People of distinction and taste know that the suburbs are very much not the place to be. Note that former governor Romney and now Deval Patrick are both giving up a suburban manse and trading up to a luxe downtown residence, closer to where the action is. People concerned about giving up quiet leafy safe suburban streets are discovering the South End, which has turned into a hipper version of Wellesley and are flocking there en masse.

As the weeks tick by, the Obama recovery gathers strength, and sales at these new developments with clock in regularly. I have no doubt. Demand is nearly unquencheable. But like anything else, these things will take time.

"The jumbo market is not functioning," says Lawrence Yun, chief economist at the Realtors group. "We hear from our members every day, 'Fix the jumbo market, fix the jumbo market.' "
Yun says lenders are increasingly reluctant to make jumbo loans.
"Even when people have the capacity to buy, they're not, because they don't want to pay the high jumbo rate," Yun says.
The above quotes are from LA Times dtd June 14.
I think Jumbo situation may equally apply to Boston condos too.

Sunshine & Lollipops, please define - explicitly - your definition of downtown city center.

1Q09 statistics from LINK - Citywide

# of sales: 339 (-33.40% vs 1Q08)

avg price: $593,668 (-14.63% vs 1Q08)
median price: $410,000 (-13.68% vs 1Q08)

avg price PSF: $522.44 (-9.74% vs 1Q08)
median price PSF: $484.62 (-12.03% vs 1Q08)

avg DOM: 123

45 Province Street is going to have a tough road ahead. Downtown Crossing is deteriorating hour by hour. Reputable business (like the London Harness Company) that were there for decades are shutting down, to be replaced by empty storefronts or (maybe worse) pawnshops and check cashing stores. The Filene's site is a gaping trash hole. The HMV and Barnes & Noble buildings have been vacant for years. Even the Buck-a-Book and Mattress Discounter types are gone or going. The whole area is becoming a wasteland.

Downtown crossing is one awful place to construct luxury condos.. same as the Ritz Carlton Towers..etc. What a joke.. Look at the luxury apartments next to the RMV . gosh.. only the doctors/interns move into that place.. they're already rich .. but fools .. once they really make the money.. they're out of there...

I have been in real estate development and sales for over 25 years. The boston market is at best a guess that prices will remain flat or perhaps fall in the months and years ahead. The Boston market will to some degree refect the stock market
advances and declines. It is not the best of times to invest in real estate. Add to this the unknown large increases in additional city taxes and we may see less puchasing and more high end rental in the downtown. Years ago it was called being an uban pionieer,.In this day and age I would suggest more of a sure thing of finding a true stable condominum community to purchase for the long term.

Sunshine & Lollipops. What Obama recovery are you talking about? His government controling policies and catering to the unions are chocking businesses, innovations and recovery of our economy. Unless he and his leftist cronies in congress are stopped in just a few short years his "changes" are going to explode into our faces with unbearably high deficits, super inflation and unbearably high taxes on almost everyone who would still have work.

Yeah, gb, thanks to 30 years of Reagan/Bush/Clinton/Bush borrowing from China, Japan and the Arabs to provide the illusion of condos and financial services growth, now all collapsing at once. Paid shill: it's all Obama's fault the party's over, right?

Let's stay on track here! The question is , can a number of condo projects in the downtown area be sucessful as they finish constuction and go to hard marketing ? My gut tells me that the Boston condo market while better than the surrounding towns will still have a tough time. Sales will be slow, pricing may suffer and a number of units may go to auction. I for one would not want to be the first to purchase a unit in any new condo complexe. You cannot tell what the future holds. The national real estate market has not yet found a bottom. Can anyone here call the real estate market bottom in Boston? I think it has a way to go before we find one

I think luxury condos b/w 750K (typically the low end of getting in...) and $1.5M or maybe even until $2M will definitely be hit and take a while. I think they might have to negotiate on price (something developers hate to do and hate even more to admit) if they want this segment to move. Over $2M is a different story I believe b/c of the type of buyer. It too might suffer, but alot of it is on whim and if a multi-millionaire comes along who loves a PH unit it will go. The $1M range is the trickiest b/c even if you have 20-25% down you need a jumbo mortgage and many of these individuals are either young professionals who are concerned about jobs and salaries or older people who might have to sell suburban houses.

Good luck with the new condo financing regulations by most of the large banks