10 Responses to “D4 sets “better” prices” »»

1. Ken
   Comment by Ken | 10/27/07 at 10:00 am

   John,

   “”MLSPIN shows twelve units having closed, already, for prices between $650,000 and

   $1.6 million. Almost all of them sold for full-asking price”

   Already? 30% downward

   “adjustment” last year and now another couple 100k in “resets ” this October and less than half

   the units have sold. How does this fact jibe with your ” Downtown Boston is different”

   view?

   Another question, who in their right mind would pay 650k for a condo when they can

   rent the same thing for almost half the cost?

2. John A Keith
   Comment by John A Keith | 10/27/07 at 10:29 am

   Ken, I

   don’t know the answers to your questions. Thanks for your comment.

3. Ken
   Comment by Ken | 10/27/07 at 11:53 am

   John,

   Thanks for your reply. Interesting to note that only one of the purchases was

   financed using a conventional 30yr fixed. The other financing included the use of no interest

   ARMS, piggyback loans and other “hope the market goes up” schemes, never ends…..

4. Ken
   Comment by Ken | 10/27/07 at 12:17 pm

   My bad, s/b “interest only” not “no interest” although it would be nice….

5. Anon
   Comment by Anon | 10/27/07 at 2:50 pm

   Ken,

   You bring up a good point that I bet a lot of people don’t think about: In a down

   real estate market, a condo owner wants to see their building neighbors with a good bit of skin in

   the game (ie., big down payments) to make sure that they don’t walk away from their units. A

   foreclosed unit can mean that everyone else has to pay condo fees for the unit until the unit is

   resold. Foreclosed units will also hurt resale values in the building.

   I agree that an

   interest-only loan is bad news. However, a piggy-back loan can be a sign of a savvy mortgage

   shopper. A piggy-back loan is a good way to avoid the high interest rates right now on the first

   $410K of a jumbo loan.

6. John A Keith
   Comment by John A Keith | 10/28/07 at 11:05 pm

   Hello.

   Apparently, the market

   shifted while they were advertising the units at D4 and the developer had to reprice the units,

   lower.

   The developer is on its second sales team, never a good sign. However, I think

   they have done pretty well overall with sales. I’m sure they wish they were sold out at this

   point, seeing as the property is finally completed and open.

   The 8 units listed for sale in

   MLS are priced similar to other condos in the South End - in the $600 - $800 per square foot range.

   From that point of view, buying at D4 would make sense. I have not seen the interiors of the

   units listed for sale, so I don’t know how they compare to other properties currently on the

   market.

   “Downtown Boston” has not had price drops of the caliber seen in the suburbs. Data

   released by the Massachusetts Association of Realtors, the Listing Information Network (LINK) and

   the Warren Group all reported the same thing - prices have not dropped in downtown Boston (meaning

   the neighborhoods including Back Bay, Beacon Hill, Back Bay, South End, Waterfront, North End, The

   Fenway, Seaport District, and Leather District). This is because this area is still in high

   demand. In addition, the numbers are somewhat skewed by the large number of new construction units

   being sold currently. Many of these may have gone under agreement six, twelve or eighteen months’

   ago, when buyers had a more positive outlook on what was going to happen in the market.

   The

   prices at D4 are not “discounted” in any way. Again, they are comparable to what other properties

   are currently selling for, throughout the city. They may have dropped prices, but all that means

   is that they had a wildly inflated view of what their properties were worth, to begin with (for

   another example of this, see Penny Savings Bank …).

   Units that closed were priced from

   $707-$856 per square foot - about the going rate for new construction in the city (but not at the

   prices seen at the InterContinental, for example, which was over $1,000 per square

   foot.)

   Again, what has been happening in the past does not guarantee what will happen in the

   future. Certainly, if the economy sours, it will have an effect on the downtown Boston market. We

   have yet to see this, although I’m checking daily, if not hourly, for signs of weakness.

7. John A Keith
   Comment by John A Keith | 10/28/07 at 11:45 pm

   Here’s what I see for the

   loans:

   #4 S: $599,900 - $417,000, 10-year interest only, 6.625%

   #9 $669,900 no

   mortgage loan listed

   #8 S: $819,900 - $400,000, 10-year interest-only, 6.125%

   #12 S:

   $654,000 - $523,000, 7-year adjustable rate loan, 6.125%

   #17 S: $1,340,000 - $1,139,000

   fixed rate loan

   #16 S: $734,500 - $540,000 fixed rate loan

   #24 S: $663,000 -

   $417,000, $179,700, 1st fixed rate loan, 2nd adjustable rate loan, 8.625%

   #3 S: $589,900 -

   $560,405 fixed rate loan

   #10 S: $854,900 - $554,000, $554,000 1st 5-year adjustable, 6.125%,

   2nd unknown

   #18 S: $1,599,900 - $1,279,920 fixed rate loan

   #21 S: $1,499,900 -

   $950,000 5-year adjustable rate loan, 6.125%

   #20 S: $1,499,900 no mortgage loan listed

8. Mike
   Comment by Mike | 10/29/07 at 9:31 am

   Thank you John for being a voice of sanity in this increasingly

   shrill discussion vis-a-vis prices on city center Boston condos.

   Those who decry the use of

   the occasional exotic loan product are missing the point in the broader scheme of things, which is

   this: the Boston city center market is immune from the price drops we’re seeing in the less

   wealthy areas outside of town. Prices are NOT going to drop here, I can guarantee it. So if you’re

   waiting for a “crash” or a “bursting bubble” then you’ll be waiting a LONG time. It’s just not

   practical.

   The fact is that Boston is a massive nexus of talent and wealth. Plus it’s a

   small, concentrated market constrained by geography. People here make a lot of money and there’s

   not much room to build to suit the enormous demand for housing.

   The economy is diverse and

   strong, the dollar is low encouraging overseas investment, and *every* *single* *year* our local

   colleges and universities pump out hundreds, if not thousands of highly specialized doctors,

   lawyers and engineers, all of whom command massive salaries and many of whom will be demanding

   housing in the city center.

   The phones at my office are ringing off the hook, morning noon

   and night, we can barely keep up with this demand. Not complaining, don’t get me wrong, LOL! So if

   you’re ready to buy, now is the time because next year it’s only going to be MORE expensive.

9. Mike
   Comment by Mike | 10/29/07 at 2:18 pm

   Maybe people are overlooking the fact that although the units

   and building might be top notch, and its next door to Atelier, if you walk in the other direction,

   its a sh*thole. Berkeley St., between Warren and Columbus, can really attract a criminal element

   after dark.

10. Observer
    Comment by Observer | 10/29/07 at 5:23 pm

    I just walked through D-4 and it looks great. The

    units have great finishes and are well designed. The issue at hand seems to be that they started at

    a price well beyond anything in the immediate area (considerably more than Atelier, though D4 is

    nicer and more “intimate”). So while there have been price reductions, they started from a number

    that in my mind was terribly high and likely unachievable. I believe right now they are priced in

    the $800/sf +/- range, which is just under Atelier re-sales and seems appropriate.

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