In this issue:
- Seaport Market Update – A Flipper’s Paradise
- New and Noteworthy
- 242 Beacon St., unit 9/10 – The Poster Child for Banning Dual Agency? – Well Sold
- 60 Chestnut Street – Non-Louisburg Square $/SF Record– Well Sold
What’s Catching Our Eye
Seaport Market Update – Flippers Don’t Always Make Great Neighbors
We don’t often comment on market activity in the Seaport as it’s largely centered around new development sales. We are beginning to see condominium unit owners/investors reselling their units at Pier 4 and Liberty Drive.
While both Pier 4 and the Liberty Drive buildings are the current bellwether waterfront Seaport properties, the Liberty Drive units are turning over faster than Pier 4. We’d chalk that up to their easier proximity to downtown. Overall, we remain cautious on new developments.
Our concern is illustrated with what we see going on at the Echelon (133-135 Seaport Boulevard), a 390 unit development. Year to date, 60 units have sold or gone under agreement at the Echelon according to MLS. Of the 44 units that have sold this year, the average unit size is 973 square feet, with an average selling price of slightly over $1.65 million ($1,664/sf). A handful of units have fetched well over $3.0 million.
Digging a bit deeper, there are many examples of individuals buying multiple units, clearly these are investors. Many of these investors have been actively buying and flipping units in other new developments throughout the City.
Buyers in these developments should take notice of the investor activity for two main reasons. First, many of these investor owned units are offered for rent, and tenants, not being stakeholders in the property, don’t always make the best neighbors. And second, investors make money on the flip, so when the developers start boasting that the project is sold out, or close to sold out, the reality is that these investor units will be trickling out. This will likely keep a lid on liquidity and valuation for some time to come.
New and Noteworthy
236 Beacon Street, unit 2E – This very nice, second floor two bedroom with assigned parking changed hands last week for $1.85 million ($1,486/sf). What’s noteworthy with this transaction is that the last sale here was $1.825 million back in 2019. After fees, the seller is taking a loss, but the seller got the gift of liquidity. Liquid markets are healthy markets – this is a good sign for the core Back Bay market.
110 Stuart Street, unit 20C (The W) – After 480 days on the market and 13 price reductions (yes, 13) unit 20C sold for $1.42 million ($1,104/sf). If you’re wondering why we’re cautions on new development – enough said. And yes, the seller lost money in this unpleasant ordeal, we’ll spare you the details.
33 Mount Vernon, unit PH – You’ll need a bottle of aspirin to figure out the marketing history of this one. The listing broker repeatedly made minor changes to the property description, each time causing the MLS system to reset the days on market back to zero.
This unit was reported as being under agreement back in January, but mysteriously appeared as a new listing last week and apparently now has an accepted offer (asking price $2.725 million, $1,602/sf). Our guess is that the January deal fell apart and re-listing it as “new” was more palatable than the dreaded “back on market.”
Transparency in real estate brokerage can be elusive, which is a problem in a buyer beware state like Massachusetts. But when a broker manipulates market data, clients should be on high alert.
Well Bought/Well Sold
242 Beacon St., unit 9 – The Poster Child for Banning Dual Agency? – Well Sold.
This 1,963 square foot three bedroom unit traded this week at its full asking price of $3.249 million ($1,655/sf) after only six days on the market. We previously chimed in with our less than favorable opinion about the property, but more importantly we were taken aback by the asking price which was a 62% premium to the recent average selling price in the building:
|Unit 8||$1,108/sf||June 2020||DOM 371||New Full Renovation|
|Unit 6||$856/sf||June 2020||DOM 70||Needed Updating|
|Unit 2||$1,028/sf||Sept. 2020||DOM 112||Recent Renovation|
Not surprisingly, this was a dual agency transaction, where the same broker represented both the buyer and the seller. Dual agency is actually illegal in many states, but it is allowed by consent in Massachusetts. In our view, consenting to dual agency is akin to asking your spouse’s divorce lawyer to also represent you.
Our curiosity got the best of us, and we wanted to know who would pay such a steep premium in a building that doesn’t exactly sell well. Public records show that the buyer is an 89 year old who lives in the building two floors below. She and her late husband bought their unit back in 1973 for $65,000. Apparently she’d prefer living in the penthouse.
We have serious reservations around dual agency, particularly when it involves the elderly. We’re very reluctantly calling this one – Well Sold.
60 Chestnut Street – A Non-Louisburg $/SF Record – Well Sold
60 Chestnut Street, a 3,282 square foot single family sold this week for $5.5 million ($1,676/sf). This updated home features a private roof deck, lower level patio, two car garage parking, and a prime Beacon Hill location.
The property was marketed as 3,282 square feet, however public records indicate the square footage is 3,199. Either way, the price per square foot is second only to 17 Louisburg Square ($1,774/sf) for a single family home in the past 2 years on Beacon Hill.
It’s a great house and having a two car garage on Beacon Hill is a huge plus, but at just over 17 feet wide, it’s one of the narrowest houses on Chestnut Street and it lacks an elevator. The seller did very well, this one was – Well Sold.