Feb 2007 08

Mr. Ahearn from Otis & Ahearn does us all a huge favor and puts out quarterly reports on the downtown Boston condominium market.  Just a few days ago he released his Year End report for 2006.  Even though not all sales have been reported, 2006 looks like it will report around $2.2+ billion in condo sales in Boston.  This makes it the third year in a row with sales over 2 billion.

He goes on to say,

The last two months of the 4Q of 2006 saw a significant pick up in activity.  It appears that those buyers who had been hesitant on the direction of pricing and held off purchasing during 2006 have re-entered the market (I can vouch for this myself just based on traffic reported and leads generated during these months on my companies websites).  This increase of buyers coming off the sidelines is reflected in the drop in inventory during 2006.

Inventory continued to drop dramatically during 2006 and, as of year end, projected total inventory is trending between 3.5-4 months’ supply which should, with continued demand, put upward pressure on unit pricing in 2007.  Note NAR national existing single family homes inventory increaed consistently during 2006 to 7.3 months’ supply, which is a completely different trend compared to Downtown Boston condominiums during 2006.

 The previous paragraph, and more importantly, the final sentence of that paragraph, is what people who are debating on purchasing a condo in Boston should pay attention to.  Do not pay attention to the ads about the bubble bursting or prices falling because in Boston, it’s just not true. 

He then points out the top reasons why 2007 will end up starting off a lot stronger than 2006:

  • Subsiding of the bubble theories & stories
  • Increasing consumer confidence levels
  • Record stock market year
  • More certainty of mortgage rate(s) direction
  • Expanding economy (locally and globally) other than national housing & automobile
  • Leveling off/reduction in housing inventory
  • Continued strengthening of the commercial real estate market
  • Continued population shift and demographic housing trend to downtown and urban neighborhoods by the substantial number of potential buyers that fall into one of three categories – young professional singles & couples, divorced middle age singles and empty nesters

I’m curious to see what you think of these opinions.  Please feel free to comment!

1 Comment

  1. Hey Nick. Hows it going? We need to catch up soon!!!

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