Brokers are optimistic about housing market in 2011

Looking back at 2010 and ahead toward 2011, real estate brokers are optimistic that the downtown Boston housing market will thrive.

A quick look at statistics compiled by the Warren Group show that year-to-date through November the median selling price for a condo in this part of the city was $561,000 among 1,415 sales. For the same period last year, the condo median selling price was $507,000 among 1,407 transactions.

The median sale price for a single-family home among 38 sales was $2.15 million for the first 11 months. A year ago the median price was $1,998,500 among 30 sales.

The year 2010 was “phenomenal for us,” said Larry Rideout, CEO and co-owner of Gibson Sotheby’s International Realty. “We’re up 30 percent in closed business in year over year and will be somewhere around $650 million in closed volume.

“During the last quarter, the high-end customer seemed to have stepped from the sidelines and gotten into the game.”

“This year was a definite improvement from 2009, and it’s only going to get better in 2011,” said top broker Tracy Campion, president of Campion and Company, a boutique firm. “Our numbers are up significantly from last year, and we anticipate 2011 will be even better. We will hit $200 million.”

Brad Sprogis and John Neale of Sprogis & Neale Real Estate said that a lot of confidence came back into the market in 2010.

“The low interest rates helped in the spring, and the federal tax credit gave [a boost] in a certain price range," said Neale.

“People in the financial service sector became more confident to make the big decisions.

The 84-unit development on one-and two-bedroom condos at 700 Harrison Ave. in the South End helped revitalize this part of the South End. The last unit was sold in October.

Neale and Sprogis noted that their South End office saw the sale of 14 single-family townhouses this year, an unusually high number.

David Stenberg, senior vice president of Hammond Residential Real Estate, said that the busy first half of the year has tapered off somewhat. “We’re on the road to recovery” from 2009, he said of the Boston market, “but it is not going to be a dramatic uptick. It’s going to be a slow, steady progress.”

He and others said they are concerned about the lack of inventory. Jon Goode, manager of the Coldwell Banker Residential Brokerage’s South End office and a director of MLS-PIN, said that in the South End there is about a three-and-a-half-month supply.

“I tell our agents how lucky we are working in Boston because we don’t have the [inflated] inventory or the foreclosure issue. When you look at the marketplace for all of Boston, prices are up 15 percent and sales volume is up 1 percent, according to MLS,” said Goode.

And as the million-dollar-plus homes sell, movement at other price points is created throughout the market.

“We’re beginning to see a resurgence in the suburban neighborhoods and a wave of empty nesters coming back into the city,” said Neale.

“That bodes especially well for full service buildings like the W, 45 Province and the Clarendon,” he said.

Kevin Ahearn, president of Otis & Ahearn Real Estate, likewise is bullish and backs up his numbers with more than 20 years of statistics. “What this year is ending up as is the second highest year in the last decade.

“We have had a record number of sales at the high end, property selling at $1,000 per square foot.”

Boston is contrarian to the national and state housing data. “For the most part, downtown Boston remained unscathed during this great recession, which is a testament to strong, local fundamentals,” Ahearn continued.

“We are land poor, the approval process [for construction] is long and costly, there is essentially a six-month supply of inventory, we don’t have foreclosures or shadow inventory, and we have low leverage in the market.

“In downtown, the market has trended toward 30 percent cash purchases every week, and other transactions have between a 20 and 50 percent down payment.

“The limited supply, solid demand and low interest rates …will increase pressure on prices in 2011 and 2012…As the economy begins to improve, we may be in the beginning stages of a bull market in the stock market,” said Ahearn.

‘What this year is ending up as is the second highest year in the last decade.’

– Kevin Ahearn, president

Otis & Ahearn Real Estate