The demand for condominiums in many Boston neighborhoods continued to surge during the third quarter, with 40 percent of units citywide selling above the asking price, data released Thursday show.
Bidding wars were most common in areas such as the South End, Beacon Hill, and Charlestown, with up to 54 percent of the condos selling for more than the initial asking price, according to LINK, a Boston company that tracks condo sales in 12 sections of Boston.
The competition among prospective buyers drove up the median price to a citywide record of $525,000 in the July-through-September period, nearly 8 percent higher than during the same period last year.
“Boston is a hot place to live,” said John Ranco, a senior associate at Hammond Residential Real Estate in the South End.
Ranco cited a pent-up desire to buy, increasing interest rates, low inventory, and rising rents as reasons why condos are fetching such high prices.
Debra Blair, president of LINK, said anxious buyers are increasingly scooping up properties quickly by paying cash and waiving mortgage contingencies.
In the most recent quarter, Blair said, several tiny units — about 500 square feet — sold for over half a million dollars.
“I found it remarkable,” she said. “If someone wants to live in the city, they’re willing to pay a premium on the urban lifestyle.”
Prices in the luxury condo segment are escalating even faster than in the market as a whole. Those condos include such amenities as doormen and valet and concierge services. In the third quarter, the median price in that category increased by more than 31 percent from the previous year, to $1.7 million, LINK reported. That is not far below the 2008 peak of nearly $2 million.
In addition to the South End, Beacon Hill, and Charlestown, LINK tracks sales in the Back Bay, Fenway, and Leather District, as well as in Midtown, the North End, Seaport District, South Boston, West End, and on the waterfront.
Blair said she doesn’t expect the sales momentum to stall anytime soon.
“The trend toward urban living, these trends are 10- to 20-year trends,” she said.
Another boost is coming from local and foreign investors who consider the area’s real estate market a good way to earn healthy returns on their money, said Michael DiMella, of Charlesgate Realty Group.
DiMella said he realized the economy had turned late last year when open houses in neighborhoods like the South End and Beacon Hill attracted lines of potential buyers snaking down streets.
“We could have charged admission for some open houses,” DiMella said. “It was like a concert.”Deirdre Fernandes
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