Damage Control Part 2
Ok so last Friday we got an eyes-wide-shut synopsis on downtown the Boston Real Estate market. First and foremost I want to thank Ms. Debra Blair, Owner of LINK the ‘once popular’, exclusive to Boston Listing Service but after this article, I would be surprised if LINK lasts another quarter I hear a freight train coming the MLS Express..combine this article, plus removal of once popular LINK system changes with the ongoing continued widespread use by Boston brokers of the national MLS Multiple Listing Service inundating Boston and can you spell EXTINCT.
Jease Deb – “Downtown is slowing down” mon or please tell us that you were misquoted as was I in the Kim Blanton article released last Friday.. If not, this is absolute non-sense, at least to the inexperienced and we would hope for you to at least qualify your own data you just have to open it up and take a look at it instead of simply downloading it to an excel doc.
I mean I hate being negative about anything but this is ridiculous and irresponsible! How can we have a large drop in transactions but only a 1% median price decline anyway
We are not blaming you here, as it is not anyones fault least not LINK as long as people understand that LINK is not in the day to day real estate business but rather the data collection business which quite frankly anyone can do.
In an urban metropolitan there will always be project specific problems and sometimes-even neighborhood specific problems, Boston included, but dont reflect upon the entire marketplace cmon!!!!!!!!!!
Full Disclosure: As a top real estate executive once told me, I am not a Bear, I am not a Bull, I am a Hunter and at CondoDomain.com we HUNT for the facts and understanding of the market! Transactions are off, no argument but it is not because the Boston market is crashing.
Down to the Nitty Gritty: The winching Globe article last week, which by the way neglected to mention the strength in the $1m plus market, compared sales data from record years 2004-2006 and first quarter 2008, um ok! Ok here we go.
First of all, every year sales are going to go down for units priced under $500,000. YTD in 2004 LINK says 713 sales and YTD 2008 362..Why Not because no one wants these units but because we have less and less available..no developer can afford to build new ones and prices have gone up on what limited inventory we have – its not because people aren’t buying – its because we don’t have any more to sell!
Down to my original theroy on this horrific article – meaning that the boom in New Construction home ownership is what skewed the Q1 ‘06 #’s in comparison with what is going on in Q1 2008.
Look what took place in ‘04-’06 (units)
In 2004: Grandview (60), Atelier (104), One Charles (232), Strada (104), Bowdoin Place ( 75), Channel Center (117)
In 2005: Parris Landing (367), Lafayette Lofts (35), Regatta Riverview (402), Gateway Terrace (266)
In 2006: InterContinental (130), 360 Newbury (55), Folio (94), Penmark (60)
Ok where am I going here Well these are large luxury buildings which have made a huge impact on the downtown Boston Real Estate marketplace. Now, as good as some of the downtown sales and marketing firms are and as hot as 2004-2006 was you dont sell these buildings out overnight (like we have all seen the stories in Las Vegas and Miami and Dubai). It take 12-30 months to sell out 50, 70 or 400 unit luxury developments meaning when all these closings took place in 2004 or 2005 or 2006, they were sold up to 1-2.5 years prior.
Does that make 2004 a record hot hot hot year if there sales volume is up 30% because Atelier, One Charles, Grandview, Bowdoin Place, Strada and Channel Center all had a huge chunk of their closings in Q1 2004 No it means that the months & years prior to Q1 2004 had done extremely well with their pre-sales of these buildings.
I could go on and on with this especially for 2005 & 2006 which had massive new construction closings. but you can do the math. Bottom line is that in a marketplace with not a ton of real estate transactions (Boston approx 3,500 a year) an influx of new developments that all pop in a single quarter (100-300 units) can skew true market transactions and valuation. THIS DOES NOT PAINT AN ACCURATE PICTURE…
Moving Forward:
Well we have seen an overview list with more than 23 new luxury developments and more than 3100 units that have closed out through the 2004-2006 cycle what’s to come in 2008 & 2009
How about a short list of 8 developments, yup that’s about it all by the way pushing new price points (WAY ABOVE 500K)!
285 Columbus (60)
The Bryant (50)
Battery Wharf (104)
FP3 (89)
North Point (338)
45 Province (150)
The Clarendon (107)
W Hotel (123)
This Boston market is set to explode NOT implode as LINK & The Globe led us all to believe. If widespread fear and short term credit crunch issues i.e. Fannie & Freddie wasn’t kicking our ass right now we wouldn’t even pay attention to the negative press and uninformed comments concerning downtown as the fundamentals speak for themselves.
Tony Longo’s Guaranteed Forecast (BET ON ME)
Don’t ask me for lottery numbers but do you want a for sure prediction and bet on a real estate play in Boston
Well, I predict Back Bay real estate values to EXPLODE in the second half of this year.
Want to know why Well call me for details but for a small hint what do you think a 50 unit super luxury development that SOLD OUT with average prices about $1,500 – $2,000 per sq/ft will do to the average sales prices when they all close in a single 60 day window Can you say explode Does that mean that Back Bay Real Estate values have exploded. duhno but I wonder what LINK will have to say!
Downtown Boston is a conservatively strong, grounded real estate market with text book fundamentals – nothing more…nothing less.
Thank you! Finally someone spoke up to the real estate devils. Good for you. You have our support 100%! Great work tony.
Hey James…thanks for the support. Not trying to attack anyone here, but needed to vent out some “street level” data on what is really going on. Be well.
Well stated, Tony. Unfortunately, many folks make erroneous statements regarding the down town real estate climate due to their fundamental lack of understanding and unwillingness to drill into the data. Thank you for accurately framing up the state of the DT condominium market while explaining the ebb and flow of new construction closings. This is helpful for industry professionals and novices alike.
Ouch. But I guess the truth hurts. I have never been a member of Link so I cant speak to the usefulness of it, but I know that I dont want the leader of an MLS service speaking poorly about the real estate market, especially if the data is analyzed wrong. Thanks for the input.
Thank you again for your balanced and sane view of the market. The media is so evil, they ( the Globe) feed the fire and fears, which in turn helps to manufacuter gloom and doom. Those of us who live in the city can see first hand what is going on. Your insights and “on the ground view” are awesome.
Michael
LD resident
Your welcome Tommy…we do our best! As you can imagine our phones are off the hook today.
Michael anytime….thank you for your continued support!
PS – what is LD resident? (Leather District?)
yes LD = leather district