According to recent data, condo prices are increasing at more than twice the rate of home values in Greater Boston’s urban core. In fact, prices are increasing so quickly that some neighborhoods have actually posted double-digit increases.
Condo Prices Versus Home Prices
During the first half of 2016, condo prices in Suffolk County, which is comprised mainly of Boston along with a few small neighboring cities such as Chelsea and Revere, increased by 9.5 percent. On the other hand, home prices in Boston and its environs experienced an increase of just 4.4 percent as they rose to $440,000.
Cambridge and Somerville also saw a significant increase in condo prices, with Cambridge increasing by 9.8 percent to $650,818 and Somerville increasing by 12.09 percent to $587,000 during the first half of the year. Situated directly north of the city and across the Charles River, the city of Cambridge was named in the honor of the University of Cambridge in the United Kingdom. The city is appropriately home to two both Harvard University and the Massachusetts Institute of Technology, both of which are considered to be among the most prominent universities in the world.
Somerville, which is located two miles northwest of Boston, is the most densely populated municipality in New England. Established in 1842, the city has been the recipient of numerous awards and accolades. Among these have been being named the best-run city in Massachusetts in 2006 and receiving the All-America City Award in 1972, 2009 and 2015.
A Luxury-Driven Market
While there are a number of factors contributing to the increase in condo prices, the increase in new luxury condo towers in the area has helped drive the prices up. Luxury condos in Boston are in high demand while the inventory is somewhat limited. The city has also seen an increase in sales within the million-dollar-and-up category with new towers being developed in Seaport. These include multi-million dollar resales at the 22 Liberty high-rise in the Fan Pier development.
In all, condo prices in downtown Boston increased by 7.4 percent to $800,000. This includes condos within the South End, Midtown and Back Bay. The downtown luxury market isn’t the only market responsible for pushing up condo prices, however, as many other markets and neighborhoods also experienced an increase. Typically hot neighborhoods such as South Boston and Jamaica Plain saw double-digit increases during the first half of 2016, while up-and-comers such as Brighton and East Boston also experienced significant increases.
While these neighborhoods are not seeing an increase in new condo skyscrapers, they are experiencing an increase in upscale condo developments with prices on the rise. In Jamaica Plain, for example, condo prices increased by 12.2 percent to $478,000 during the first half of the year. South Boston experienced an even bigger increase of 13.6 percent to $615,000, while East Boston increased by 14 percent to $400,000. Allston also had an impressive increase of 13 percent with median condo prices reaching $425,000.