Boston Urban Hub 4Q 2015

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The Boston Urban Hub Fourth Quarter 2015

Welcome to the Fourth Quarter 2015 edition of The Boston Urban Hub, Raveis Research’s quarterly review of the condominium market in Boston’s urban core. Our goal is to provide insight on emerging trends by reviewing market data from

closings in Fourth Quarter 2015 and comparing it to closings that occurred in the previous quarter and the same quarter a year ago. By utilizing our extensive experience in marketing new condominium developments, we will analyze new development sales within the context of the broader condominium market.

We have defined the Urban Hub as the Boston neighborhoods with the highest concentration of multi-family housing, either built as “for sale” product or luxury rental with the potential for future sale and/or conversion. The neighborhoods include Back Bay, Beacon Hill, Charlestown, Chinatown, Fenway, Financial District, Leather District, Downtown/Midtown, North End, South Boston Waterfront/Seaport, South Boston, South End, Theatre District, Waterfront and West End. We have recently expanded our definition of the Urban Hub to include the emerging neighborhoods of Dorchester and East Boston.

Condo sales in Fourth Quarter 2015 fell slightly however, it had a 25% increase year over year. The Downtown/Midtown, Back Bay, Waterfront and Seaport neighborhoods led the market with the highest Average Price while South End continued to experience the highest number of sales.

The Boston condo market has reached a tipping point with developers making the strategic decision to build “for sale” product rather than luxury rental. Influenced by record low inventory levels and the successful pre-sales performance of projects including Sepia at Ink Block, Millennium Tower and 22 Liberty, several new condo developments have been announced, including the groundbreaking of Four Seasons Hotel & Four Seasons Private Residences at One Dalton Street and the conversion of 25 rental units to condos at The Mandarin Oriental.

We hope you will find this edition of The Boston Urban Hub informative and useful. Today’s market is in an exciting transition, making it even more important to work with a sales and marketing partner with a proven track record of producing optimal results for its developer clients. We welcome any questions you may have regarding this report and the future of Boston’s condominium market

Sincerely,

Rachel Marden Director of Research

South End experienced the highest number of sales ...

*All information in this report sourced from LINK

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Fourth Quarter 2015 Neighborhood Sales Summary

With the increase of new development inventory closings in The Seaport, the neighborhood experienced a 480% increase in number of sales year over year. The Average Price in The Seaport surpassed Back Bay for the highest in the Urban Hub.

... Average Priceper SF increased 24% ...

Fourth Quarter 2015 Urban Hub Sales SummaryWe had a robust Fourth Quarter in the Urban Hub with Average Price increasing 40% year over year. Number of Sales, Median Price, and Average Price per SF also increased significantly by over 20%.

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Sales – ClosingsWith 827 closed sales in the Urban Hub, Fourth Quarter 2015 followed the seasonal trend of decreasing fourth quarters, however it increased 25% year over year.

Sales – Under Agreement

Sales Under Agreement is derived from the number of condo listings reported as being under agreement during the quarter. A sale usually closes within eight to ten weeks and in many cases closes in the following quarter. With the return of new development sales, in which contracts are signed pre-construction and during construction, closings may occur as much as three years later. However, not all new development sales are reported as under agreement until they close. Sales Under Agreement in Fourth Quarter 2015 followed the seasonal trend of declining quarter over quarter.

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1200

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

466

1055 1043

760

504

1054

1156

870

597

965 923

662

495

890993

827

0

300

600

900

1200

1500


436

778

482 482418

1211

482385

331

645

340 339 279

546

329 310

430 765 472 479 415 1192 476 381 330 638 336 331 274 539 325 276

6 1013 3 3 19 6 4 1 7 4 8 5 7 4 34

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Sales By Price Category Sales of condos by price category were relatively stable year over year with sales in the $401,000 - $800,000 category continuing to represent close to half of all sales in the Urban Hub.

... condos by price category were relatively stable year over year ...

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Sales Comparison By NeighborhoodThe South Boston and South End neighborhoods continued to lead the Urban Hub with the highest number of condo sales in Fourth Quarter 2015.

Sales Comparison By Square FootageThe 1001-1500 SF range continued to lead the Urban Hub with the highest number of condo sales in Fourth Quarter 2015.

102

39

82

71

27

26

37

116

152

213

31

152

17%

21324%

116

13%

102

12%

82 9%

71 8%

39

4%

37

4%

27

3%

263%

31

3%

165

192

279

80

85

26

192

23%279

31%

165

20%26

3%

85

10%

8010%

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Sales Comparison By Number of BedroomsTwo Bedroom condos represented 50% of all condo sales in the Urban Hub in the Fourth Quarter 2015.

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4Q14 4Q15

41 438

257 88

257

4188

438

5%

11%

53%

31%

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0

100000

200000

300000

400000

500000

600000

700000

800000

PriceAverage Price increased 31% quarter over quarter Fourth Quarter 2015, Average Price also increased 40% year over year.

Historical Sales PriceThe Urban Hub had tremendous growth in 2015, Median Price increased 21% year over year.


500,

000

511,

000

487,

500

525,

000

537,

250

536,

000

525,

000

645,

000

660,

000

600,

000

599,

500

630,

000

630,

000

692,

000

640,

000

762,

500

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New Developments

New Development condos were in strong demand in Fourth Quarter 2015 with very brisk pre-sale activity at Sepia at Ink Block, 22 Liberty and Millennium Tower. With the introduction of the ultra-luxury product at Four Seasons Hotel and Four Seasons Private Residences at One Dalton Street, the Boston condo market will enter a new level of pricing, services and amenities.

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Documents

Boston Urban Hub 4Q 2015