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Yikes! Condo prices back at bubble levels

Posted by Scott Van Voorhis September 24, 2013 08:42 AM

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Looks like crazy condo prices are back.

The big news this morning is yet another big jump in home sales in Massachusetts, hitting levels not seen since 2005.

But take a look at what's happening with condos. The median condo sale price across the state appears to have hit a new record in August, weighing in at nearly $320,000, The Warren Group reports this morning.

That smokes that last high water mark, set back in August 2005, when the median price of a condo in Massachusetts reached $290,500.

The idea that condos are blowing past their bubble-years price records also holds up when you look at the numbers over a several month stretch. That's generally a more reliable indicator than just comparing one month to another.

Even then, the numbers hold up nicely - or not so nicely, maybe, if you are buyer trying to land a condo right now.

The median condo price in Massachusetts for the first eight months of 2013 comes in at just a shade or two under $300,000 - or $295,000 to be exact.

That's compared to $279,900 during the first eight months of 2005, according to Warren Group numbers.

So what in the world is going on?

Certainly the Cambridge, downtown Boston and Somerville (as in Davis and Porter squares) condo markets are on fire right now. Selling a condo in the Back Bay or Beacon Hill for a couple million ceased being a big deal a long time ago.

But higher home prices are also pushing would-be buyers into condos, long the Bay State equivalent of the starter home.

And all those refugees from the overpriced single-family home market, in turn, are pushing up the price of condos, making them almost as unaffordable now as single-family homes.

In fact, condo prices are catching up fast with home prices, with the median price of a condo, at just under $320,000, just a mere $20,000 below the median home price, now $340,000 after a 10 percent jump in August.

Condo buyers, sellers, what are you seeing out there? Are condo prices getting out of hand again?

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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