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Sales of Luxury Real Estate: Offsetting Market Drop?

It appears as though the city of Boston, and in particular, the more high-end condominiums, are doing far better in terms of average prices than they have in recent memory. We have been quite optimistic about the direction our real estate market is heading in as we go on into this new year, although the results are not consistent state-wide. In Massachusetts, there is evidence from the Multiple Listing Service (MLS) that shows how some of the more affluent towns and neighborhoods are thriving while the more moderately priced homes that make up the majority of other towns are in a bit of a struggle of sorts.

For single-family homes and condominiums, the total volume of sales from 2010 to 2011 had dropped by 3 percent for the entire state. In addition, the price for such homes also decreased by an average of 2 percent from $289,000 in 2010 to $284,000 for the past year. Boston has performed well though with an improvement of 3.3 percent in condominium sales over the fourth quarter in 2010 compared to the same quarter in the past year. These results brought forth 758 property sales during the period.

There was a 1 percent decline in sales volume in Boston over the past year compared to that of 2010. This showed great stability as well allowing for rising median prices for homes and condominiums which increased by 2.1 percent to $375,000. Furthermore, there were also improvements in the average sale prices for these type of properties, which compared to 2010 rose by 4.5 percent to $544,475. A great cause for this is the higher-end homes which were strong in demand and helped pull up some of these numbers. For example, the most expensive condominium in the past fourth quarter of 2011 sold for $6 million at InterContinental at the Boston Waterfront.

It can be inferred that the shortage of available land for building new units that has caused the price increases in the city as demand continued to rise. It seems as though when there is new construction it has flown off the market and sold immediately. This can be compared to the average days on market for Boston and state-wide which rose only by a few days for each to 103 and 133, respectively. This has shown the recent stability and generally slow rate of new construction. We will see if these trends continue in a years time!

More Information: Boston Herald

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