There’s a Condo Shortage in Boston, Believe It Or Not
Two new condo towers are being built but won’t be ready until 2016 and later.
A bevy of deluxe new residential towers are taking shape on the Boston skyline, but believe it not, the city is actually facing a luxury condo shortage.
There has been no dearth of new luxury towers and high-rises built over the past few years, but most have been rentals. There are only a few smaller, scattered condo projects here and there.
And while two major new condo towers — Millennium Tower and the Four Seasons — are now under construction, they won’t be open until 2016 and beyond, said Kevin Ahearn, president of Otis & Ahearn, a downtown condo marketing and brokerage firm.
That means a tough couple years for buyers looking to snag a luxury condo in Boston, with soaring prices and fierce competition for the few listings on the market.
“It’s incredibly tight,’’ Ahearn notes. The new towers “can’t be delivered before 2017 or 2018 because you have to allow a three year time period to build those towers.’’
In fact, the number of condos on the market downtown is almost miniscule, at least in the top towers. Just two dozen units are currently up for sale out of a total of 2,180 in the 18 most expensive condo buildings in Boston, Otis & Ahearn reports.
Across Back Bay, Beacon Hill, South End, West End, Theater District, Fenway, and the Seaport, the number of listings has fallen below 300, or less than a month’s supply. Typically a market is considered balanced when there are six to eight months of unsold condos on the market, the firm reports.
Meanwhile, the new, 61-story Four Season tower, which just started construction near the Christian Science Plaza, won’t do much to help with the current inventory crunch in the short-term.
The new 60-story Millennium Tower is farther along, with the new high-rise slated to welcome its first residents in the summer of 2016.
Even so, already half of the towers 422 multimillion-dollar units have already been pre-sold, leaving just a couple hundred condos still up for grabs, Ahearn said.
Other new condo towers are also likely in the works, but still in the early planning stages, notes David Crowley, director of sales and marketing at Raveis Marketing Group.
Among new projects in the early stages are plans for a 31-story “skinny tower’’ on Tremont Street facing Boston Common, with each condominium having an entire floor.
The shortage of condos for sale, in turn, is helping keep prices moving steadily higher.
In those high-end downtown neighborhoods, condo sales of $1 million and up increased nearly 50 percent in 2014 through early November, according to Otis & Ahearn.
“Clearly, real estate is a commodity,’’ Crowley said. “There is no doubt the more inventory there is, the less price pressure there is.’’
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