Back Bay Blogger

All eyes have been focused on the local housing market this year. The Massachusetts Association of Realtors and the Warren Group just released their data summarizing January 2008 Sales and both indicated a huge drop in activity from a year ago in both the single family and condominium markets ~ statewide.

As I noted in previous posts, the local Boston market has not shown the same trend as the statewide figures indicate. A quick look at actual Back Bay transactions as recorded in LINK demonstrates that Boston’s condominium market has in fact remained stable from a year ago. We did not see the same 30% drop of in activity as reported in the statewide summary.

January 2008 ~ 36 Sales — Avg. Selling Price: $1,256,739 — Median Selling Price: $710,000 — Avg. $/SF: $823 — Avg. DOM: 118

January 2007 ~ 35 Sales  – Avg. Selling Price: $1,034,329 — Median Selling Price: $656,000 — Avg. $/SF: $698 — Avg. DOM: 95

Consumer confidence can be influenced by such overgeneralizations. My clients appreciate my experience as a Realtor in researching actual market data to provide a more accurate snapshot of market trends in their particular niche market or neighborhood.

I am often asked … Is the housing slump over ? Have prices hit rock bottom yet ? What is the current value of my home ? As a first time buyer, is now a good time to buy ?

MA Association of Realtors January 2008 Data reflects …. The condominium market also experienced a significant decrease in the number of units sold this January, with a 34 percent drop compared to January of last year (from 1,271 units sold in 2007 to 843 units sold in 2008).  On a month-to-month basis, condominium sales were down 24 percent compared to 1,107 units sold in December.            

Boston Herald reports .. Sales hit new lows ~ Bay State home, condo prices down in Jan.

By Jerry Kronenberg  |   Tuesday, February 26, 2008   Massachusetts house sales tumbled nearly 30 percent last month to their lowest January levels on record, new figures show…… making it the worst January in the 21 years Warren has tracked sales using current methods. In fact, the market hasn’t seen this few sales in any month since February 1991.

Condo sales fared even worse, dropping 36 percent to just 1,135 units changing hands, the Warren Group said.

The firm added that the median condo price fell 1.5 percent while the median house value dropped 4.4 percent.

“We are an expensive place where house prices rose a lot during the boom, so I’m not surprised that things have slowed considerably,” Wellesley College housing economist Karl Case said.

Case blames much of the latest downturn on foreclosures, stricter lending standards and other woes hitting lower-priced housing.

“The lower tier is pulling everything down,” he said. “If you talk to brokers outside of Mattapan, New Bedford, Fall River and other places with lots of foreclosures, there’s actually a considerable amount of sales activity going on.”

Case believes the market’s middle- and higher-price segments, which he defines as houses costing $312,000 or more, could begin stabilizing as early as June.

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Listings that priced correctly still sell quickly in today’s uncertain real estate market. I put two listings online recently that sold the first weekend. Some might ay it was luck however both of my sellers decided to list now, normally a slow time of the year primarily because there was no competition in their particular market segment. In fact, in many segments the inventory remains very low at this point in 2008. Both of these listings stood out in the sense that they were unique and priced right.

952 Centre Street, Jamaica Plain MA was listed at $1,400,000

Quality taken to the next level! Maplehurst Builders renovated this total gem of a Carriage House in 1996 and the current owners took it one step further, adding a gas fireplace, full surround sound TV / Entertainment system, and renovated the kitchen and bathrooms. Set back from the road, and located on a gorgeous, landscaped lot, this dramatic and private oasis opens up to large, terraced decks and a sunny rear yard with direct access to the Arnold Arboretum. Country living in Boston!

88 Kingston Street, Boston MA was listed at $469,000

Lafayette Lofts - 2005 gut rehab of this hip, convenient and secure downtown loft building. LOW CONDO FEES. Fantastic location, steps to South Station, financial district, and Chinatown. Washer dryer in unit, high ceilings with painted timber beams, slick stainless kitchen. Huge secure storage in basement and rental parking available under building through lobby of State Street Financial, staffed 24/7 by security. 

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Newspaper recently reported that the 4th quarter condominium sales in Boston tanked from last year. Once again, out local market gets unfairly trashed by the media who grab a few numbers without understanding what they are actually looking at. 

Here is the problem with just looking at the numbers … the LINK summary does not accurately reflect the market trends because it does not include an analysis of the new development(s) closings and unit prices, real data that would skew the average / median and total sales.  The simple answer to the year to year variations is:

1. Downtown Boston has been solid through all 3 years. 

2. High End Condominium Sales in 2007 compared to 2005 - $1 Million plus, $2 Million plus and $3 Million plus is at or higher than 

record levels. This fact is very different than LINK’s 4th Quarter comparison and the story trend as reported in local papers. 

3. The difference and apparent drop from 4Q 2006 was due to a spurt of high end sales in 06 that we did not have in 4Q 2005 or 4Q 2007. 4th Quarter 2006 saw 118 sales that closed totaling $121M at Folio, 500 Atlantic, and 360 Newbury.

4. Actually, the total absorption for 2007 exceeded 2006 so reporting that the 4th quarter tanked base on incomplete numbers and analysis is reckless at best.

5. We do continue to see the under $500k transactions are fewer in Downtown Boston but are increasing in Urban Emerging Markets outside of Boston.

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A message from Kevin J. Ahearn, President, Otis & Ahearn. 

As we kick off the New Year, we are pleased to announce a strategic alliance with Chase, one of the nation’s leading residential housing lenders. In naming Chase as our partner for mortgage services, Otis & Ahearn, Chase and our mutual customers stand to benefit. 

In this challenging mortgage environment, the alliance with Chase offers us greater transaction control and a wealth of local support throughout our clients’ home purchase and sales process. Chase’s team of Loan Officers in the greater Boston area can enhance and facilitate our sales by delivering the on-time performance and superior service our clients expect and deserve. In addition, our ability to leverage the Chase brand with its reputation for stability and experience will help us strengthen our position in the market.  

From Chase’s perspective, the alliance with a premier residential brokerage and marketing company like Otis & Ahearn affords them a significant opportunity to expand their business and build strong partnerships with our top-shelf real estate professionals. 

Customers will benefit from the convenience, superior financing options and priority services that Chase provides. In addition to a full array of fixed and variable mortgages, Chase offers programs designed specifically for buyers of new construction properties, such as the Chase Lock-Solidsm Platinum Program, which gives buyers the ability to lock-in an interest rate for up to 12 months. The Chase Premier Buildersm Program includes additional incentives such as extended life of credit documents for buyers, guaranteed on-time closing documents and a final inspection waiver. Both of these programs will be available to Otis and Ahearn clients. 

About Chase

Chase originates $150 billion in mortgages and home equity annually, and services a portfolio of $500 billion in residential mortgages and home equity.  Its parent company, JPMorgan Chase & Co. (NYSE: JPM), is a leading global financial services firm with assets of $1.3 trillion and operations in more than 50 countries.  Information about Chase’s mortgage products and services is available at www.chase.com. 

Chase is currently working closely with Otis & Ahearn and their clients to meet the mortgage needs for Otis & Ahearn’s 4 downtown Boston offices plus onsite offices at new developments including Residences at the InterContinental and The Penmark, as well as other new condominium developments. “During 2007, a record year for Otis & Ahearn, the company’s combined brokerage and marketing services were involved in 550 transactions and approximately $450 million in sales.” 

Kevin J. Ahearn, President, Otis & Ahearn. 

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Three units are currently on the market at the ultra luxurious Mandarin Oriental Condominium on Boylston Street in Boston’s Back Bay neighborhood with prices that continue the trend we are seeing with pricing in the high end  / new construction / full gut rehab condo conversion markets. 

$4,295,000  Unit W - 10C  2683 square feet ( $1,601/sq ft)  2 + bedrooms,   2.5 baths, 10th floor rear,  2 parking, condo fee $3,600 / month

$4,500,000  Unit E - 9B  2580 square feet  ($1,744/sq ft)  2 bedroom,  2.5 bath, 9th floor front, 1 parking

$7,000,000  Unit W - 10B   3564 square feet  ($1,964/sq ft)  3+ bedrooms,  3.5 baths, 10th floor corner unit, condo fee $4,000 / month 2 parking

In addition to these units, there are more than 20 other condominiums on the market in the Back Bay listed at over 3 milion dollars, the average asking price is $4,649,043 which  is on average, a price per square foot ( $/SF) : $1,429 

Read more about the Mandarin Oriental Condominiums and Robin Brown 

Mandarin Oriental Condominiums and Hotel in Boston

The Mandarin Oriental Hotel in Boston will open in June 2008 after numerous years of designing and decision making. The years of work will in the end be worth while, multiple condominiums in the upper levels of the hotel have sold from upwards of $2million all the way up to $15million, raising the median home price in the Back Bay area considerably. Once the hotel finally opens it will be recognized as one of the most prestigious and luxurious hotels in the world, and will raise the standard of luxury in the world city of Boston.

Robin Brown contributes his expertise in the Mandarin 

Well-heeled Bostonians have always sought the city’s hottest new address, dating to the the filling of the Back Bay in the 19th century. More recently, in the 1980s, it was the Four Seasons and Heritage on the Garden. In the 1990s, it was Trinity Place at Copley Square. Recently, the torch passed to the Ritz-Carlton Towers, Boston Common — Red Sox slugger Manny Ramirez’s home — and Atelier|505 in the South End, where Channel 5 news celebrity Natalie Jacobson lives.

The Mandarin will fill a gap in a scruffy section of Boylston Street in front of the Prudential Center. Its affiliation with Mandarin Oriental Hotel Group, which operates hotels from Bangkok to London and will manage the Boston hotel, enhanced the complex’s snob appeal. Its 15,000-square-foot spa will be similar to Mandarin Oriental, New York’s, which has “relaxation lounges” and VIP suites outfitted with fireplace and sauna. Room rates there exceed $700 a night.

Preparation for construction in Boston began late last year for the underground parking garage; the building is slated for completion in late 2007.

Mandarin Boston “will without a doubt be the nicest, most beautiful hotel and residential development the city has ever seen,” said Paul Palandjian, president of Intercontinental Real Estate, which developed the Nine Zero boutique hotel.

To sell the condos, on the floors above the hotel, Brown and Weiner relied on word-of-mouth and their contacts in charitable organizations, downtown businesses, and at the Four Seasons.

Brown, 50, moves in rarefied circles but was not born to wealth. He grew up comfortably, an executive’s son in Grantham, England. His first exposure to luxury came as a teenager, washing dishes at a chic hotel. He has an ownership stake in the Mandarin partnership, CWB Boylston LLC, but he put up no money into the project. Weiner and Cohen brought financing and engineering know-how; Brown contributed the idea and his expertise in service.

Brown sports Hermes ties and oozes elegance. At the Four Seasons, he won over the upper crust who might need a window table at the hotel’s Aujourd’hui restaurant. Star Market heir and former Channel 7 owner David Mugar threw business and family parties at the hotel, including for his 60th birthday and a retirement party for his longtime secretary. Mugar and Weiner have done real estate development projects together.

When Mugar learned about the Mandarin, he bought a unit and invested in the project. His primary residence is in Cotuit on Cape Cod, but he keeps a place at the Belvedere condominiums, a new development on the Huntington Avenue side of Prudential Center. “Mandarin is a better location,” with views of the Charles River and downtown, Mugar said. Buyers said they like its proximity to stores at Copley Place and on Newbury Street, and to Symphony Hall.

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