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Sorry luxury condo haters, downtown Boston is different

Posted by Scott Van Voorhis March 22, 2010 07:00 AM

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Here's some bad news for all the doom and gloomers eagerly awaiting the great Boston luxury condo collapse: It's not happening.

Luxury condos have certainly gotten a bad rap thanks to the real estate downturn.

In cities ranging from Las Vegas to Miami, deluxe penthouses and other posh high-rise digs are being foreclosed on and auctioned off at fire sale prices.

But in Boston, the downtown luxury market appears to be headed in the opposite direction.

After a pretty dismal stretch in early 2009, sales of $1 million-plus condos are up dramatically, with 57 sales so far in 2010 compared to just 25 in the first ten weeks of 2010, reports Otis & Ahearn, the Boston-based luxury marketing and research firm.

Not exactly encouraging news for all those who have been gleefully waiting for the inevitable demise of Boston's luxury condo market, now is it?

If that were not enough, here's another stunning stat, courtesy of Otis & Ahearn.

Half of those million-dollar-plus sales were for more than $2 million, with 28 condos fetching at least $1,000 a square feet, a key indicator of multimillion-dollar sales, the firm finds.

Activity in the key $500,000 to $999,999 range has also soared, with 102 sales this year, also double the same period in 2009, Otis & Ahearn finds.

The average sale price so far this year is up to $740,970, compared $592,004 in early 2009, the firm reports.

The one caveat, of course, is that some of the uptick can be attributed to closings at the newly opened W Boston and Clarendon towers. Some of these sales were in the works for months or even years. But while that accounts for some of the uptick - and similar arguments could be made for 2008, which also saw some major openings - it hardly is all of it.

It's also certainly reasonable to keep in mind that early 2009 was a particularly bad time for luxury real estate sales.

Yet pending sales, a fresher indicator of spring market activity, are showing a similar pattern.

There are 65 pending sales for downtown condos on the market for $800,000 or more, a jump of at least 25 percent over last year, notes John Ford, a top Boston broker.

The downtown market certainly has some challenges ahead, with lots of still empty units in a handful of newly built condo towers.

But Boston did not experience the massive overbuilding that took place in some markets, with a swanky new condo high-rise taking shape on practically every block in Miami.

This still may be the Great Recession, but the rich, after going into hiding during the bleak winter of 2009, are back in the downtown luxury condo market.

This blog is not written or edited by or the Boston Globe.
The author is solely responsible for the content.

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Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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