Rising Boston Prices to Attract International Investors
No longer known as a bargain city, Boston’s condos will draw wealthy international buyers.
How crazy are prices for Boston’s top condos? Crazy enough that jet setters from Hong Kong and London may soon be griping about them.
Downtown luxury condo prices are escalating so rapidly that Boston is now on track to join the global elite of cities with the most expensive sky-rise digs, rubbing elbows with the likes of Geneva, Paris, and Hong Kong, new stats suggest.
The number of sales of high-end condos – defined at $1,000 a square foot or close to $1 million and up – has soared nearly 30 percent so far in 2014 compared to last year, finds downtown Boston brokerage, research and marketing firm Otis & Ahearn.
That’s the hottest the super luxury market has been since 2004 and 2005, when the last real estate boom was kicking into high gear, notes Kevin Ahearn, president of Otis & Ahearn.
Given the current pace, Boston could wind up in the top ten or 12 most expensive condo markets in the world by the end of the decade, he predicts. “I would say we are in the middle a big run.’’
As it stands now, Boston is just starting to shake off a reputation as a relative bargain for international tycoons who scoop up deluxe digs around the world.
While downtown Boston condo prices may seem crazy by New England standards, cities like London, where top units can fetch more than $4,000 a square foot, have long lorded it over everyone else. A 275-square-foot condo in Hong Kong – about the size of those relatively less expensive “micro-units’’ being pitched to young entrepreneurs in Boston – recently fetched a stunning $772,000.
But the price gap is closing fast amid an explosion in sales in downtown Boston of ever more expensive condos.
There have been 38 condo sales of over $1,500 a square foot so far in 2014, with two months still left in the year. There were just 14 such sales two years ago, Otis & Ahearn reports.
That price tag is also roughly the median price of high-end properties in Beijing, number 11 on a 2012 list by residential and commercial property consultancy Knight Frank of the most expensive condo markets on the planet.
Some sales are even reaching higher, with a Four Seasons condo fetching nearly $3,000 a square foot earlier this year and a Commonwealth Avenue unit punching in at more than $2,700.
Meanwhile, a boom in new condo tower construction downtown featuring Manhattan-style luxury towers is poised to further narrow the gap.
There is already a “whisper campaign’’ about how the developers of the planned 60-story Christian Science condo tower and hotel will be charging $3,000 or even $4,000 a square foot, according to Ahearn.
Meanwhile, the developers of Downtown Crossing’s new Millennium Tower aren’t whispering, they are shouting. The tower’s 60th-floor penthouse is on sale for $37.5 million — roughly three times higher than what any condo has ever sold for in Boston.
So far, most of the buyers for downtown condos have been wealthy locals or at least US buyers, though the Theater District’s W Boston tower gets an honorable mention, with roughly a quarter of its units snapped up by foreign buyers.
That’s about to change as well, Ahearn predicts, pointing to a flurry of new direct connection flights from Logan to various points around the world.
“As you start to see more hotels with five-far capabilities, I think necessarily you will see more international visitors and investors in real estate,’’ he said.
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