I just got a call from a reporter from the Boston Globe for some info about the sub-$500K market in the Back Bay, I assume for an a future article he's writing. Besides that, there has been some interest from our clients in trying to differentiate the low end condo market in the Back Bay (sub $500K) versus the rest of the market, so I was curious for some data to shed light on that market segment, so here's what I put together. Some have thought that the high end market is holding up the lower end so I pulled up data from the MLS about all sold condos in the Back Bay each of the past four years, from January 1 through November 15 of each year:
Back Bay Market (under $500K)
# sold = the number of condos sold sub $500K
AVG Price = average sale price of all the sub $500K condos
MED Price = median sale price of all the sub $500K condos
Volume = total dollar value of all the sub $500K condos
D.O.M. = average days on market
Sale/List Price = the average % the sale price was to the list price
In the second column next to "# sold" and "volume" is the percentage that the sub $500K condos made up of the total market (all price ranges). So, in 2005 for example, there were 129 sub $500K sales to 346 total sales for a percentage of 37%.
As you can see, it does indeed look like there is a little dip for the sub $500K Back Bay market in 2008. This lower end market segment is making up slightly less of the overall market this year, indicating that there are more higher end sales contributing to the overall market statistics like median price, volume, etc. While I wouldn't go so far to say, based on this, that the higher end market is "carrying" the lower end, there is some impact that the luxury level condo sales are having on the overall price levels in the Back Bay. Doesn't look like a huge impact, but it is good to know nonetheless.
Buyers in that lower price range are certainly more impacted by some of the financing crisis than some of the luxury buyers (at least until very recently). They typically have smaller down payments and may be "stretching" a little bit more to get into the Back Bay. With more difficult underwriting and just general uncertainty in the environment, there are fewer buyers for that price range. That being said, there are buyers out there now and the sub $500K Back Bay market still looks very tight with only 28 active units for sale currently which is less than 2.5 months of inventory!
Anyone have a $500K condo in the Back Bay to sell?? The market could use a few.....