Over the past several years, many people have decided to sell their suburban homes and move into urban areas.
Boston has definitely benefited from this trend.
More importantly, there’s been such wealth created, coupled with the “low cost of money” (i.e., low interest rates) that people have been pouring their money into real estate.
Since there’s only a limited amount of land (and thanks to restrictive zoning laws), demand has outstripped supply.
This led to higher prices for new and existing condos.
For all these reasons, developers started building new, luxury condo buildings in the downtown Boston area.
We’re about to see several high-profile projects come on the market, at prices unheard of.
Builders pushing two planned condo high-rises are now quoting prices well above the current gold standard – $1,000 a square foot.
The price increases in the new towers come amid an overall upsurge in both condo sales and prices in neighborhoods like the Back Bay and Beacon Hill.
The developer behind the planned redevelopment of the Filene’s complex, which will include condos on the top floors, confirmed he is exploring prices that could hit $1,500 a square foot.
Developers of 45 Province and the Residences at the Mandarin Oriental are also testing this price range (in fact, 49 out of 50 units at the Mandarin are under agreement, already).
It may seem as though everywhere you look, there’s a new tower going up.
Far from it.
I think demand still outweighs supply.
These suburbanites have a lot of built-up equity. If they need to list their homes for $800,000 instead of $1 million in order to sell, they can (they bought at $250,000!).
Plus, again, there’s a lot of money out there, and will be more, as more old people die and transfer their wealth to the next generation.
If we continue to have a healthy economy, luxury projects such as these will continue to succeed.
Luxury condo prices surge: Builders in Boston set to raise the bar – By Scott Van Voorhis, The Boston Herald