There were a couple of articles recently in the Boston.com real estate blog about the Boston condo market. One was about a recent record setting $10.5 million sale back in May at the Four Seasons for a 3,525 square foot, four bedroom, three and a half penthouse unit. That's just shy of $3,000 per square foot folks! This same unit sold in 2000 for $6.3 million so someone made a pretty great investment.
That appreciation was the subject of another blog post which gives warning to a possible real estate bubble in the condo sector of the Boston market. It stated that the average price of a condo in Boston in 2000 was $438,000 compared to $738,000 today. That's a whopping 71 percent increase in prices.
The median price of a condo there is current at $330,000 compared to the bubble bursting year of 2008 when the median price was $274,000. Some feel that the market is just a tad overheated and possibly signaling another crash might be around the corner.
I don't think we need to work about a condo market crash here in the Lakes Region, however, as the two following charts show. Our peak year in terms of price was 2007 at an average of $209,417 and we currently coming in at an average of $176,504 two thirds of the way through 2014. Our peak year for total sales was in 2004 when 381 units were sold. We are well below that now with 206 units sold in 2013 and on track to finish off 2014 well below that.
So what's the difference between the high flying Boston market and the Lakes Region condo market? Well, the smart ass answer is just about 95 miles. The real answer is that the Boston condo market is a primary residence market and ours is mostly a discretionary vacation home market. We are all about fun and enjoying all that our area has to offer and the Boston condo market is about living in the city to avoid the horrendous commute to get into the city to go to work! And when people have to pay so much for housing in the Boston area they, unfortunately, might have to think twice about spending any free money they have on a second home up here.
Please feel free to visit www.lakesregionhome.com to learn more about the Lakes Region real estate market and comment on this article and others. Data was compiled using the Northern New England Real Estate MLS System as of 8/25/14. Roy Sanborn is a realtor at Four Seasons Sotheby's International Realty and can be reached at 603-677-7012.