With the average condo price in Boston increasing by more than 71 percent since 2000, purchasing a Boston condo is almost as good of an investment as purchasing stocks. Despite the temporary lull in early 2009, the average condo price rose from $438,000 in 2000 to $752,000 by the end of 2013, representing a compound return of 3 to 5 percent. Unlike some markets around the country that have started to level out, the Boston condo market appears to be just getting started.
In May of 2014, the four-bedroom, three-and-a-half bath Four Seasons penthouse known as Unit 1201 sold at $2,908 per square feet for a total of $10.5 million. While this is a record-breaking price, the average price per square foot for a condo increased to $728 during the second quarter. Luxury units have increased by 15 percent with the average price per square foot reaching $1,188.The price of condos has increased so much that the gap between condos and standalone homes has decreased significantly. In May, the median price of a condo was $320,000 while the median price of a house was $340,000.
This year alone, condo prices increased by 13 percent during the first five months. Single-family homes, on the other hand, only saw a 6 percent increase. What has caused the rise in condo prices? Simply put, condos are seeing a surge in popularity in Boston. While they were once seen as a second choice to a single-family home, many of today’s buyers are more interested in purchasing a condo than purchasing a home. Not only are many condos located in a convenient location, but they also require less maintenance than a single-family home.
The preference for condos over single-family homes is so great that sales of single-family homes fell by almost 4 percent when compared to the same time last year. Condos, on the other hand, saw an increase of 9 percent in sales. Rather than being a starter home for young couples or an option for older couples interested in downsizing, families with children are increasingly setting their sights on condos. Many of these families say they are interested in a condo because they want to be able to live in the city and to walk to work. They also appreciate the amenities and conveniences that condos have to offer.