Boston’s luxury real estate market shows no signs of cooling. The city posted its highest condominium sale of the year earlier this month when a Back Bay unit sold for $7 million.
The three-bedroom condominium at 245 Commonwealth Ave. boasts an eat-in chef’s kitchen, two walk-in pantries, a private terrace, and, in a city where parking is at a premium, five parking spaces, according to Coldwell Banker Residential Brokerage in New England, the listing firm. The unit is part of a newly constructed triplex in one of the city’s priciest neighborhoods, a place dominated by longstanding brownstones.
These multimillion-dollar sales are becoming increasingly frequent in Boston as new towers of luxury units go up across the city, highlighting sweeping penthouse views and amenities such as spas and valet services. Last year, a Beacon Hill penthouse with an elevator and its own library fetched $13 million, according to LINK, which tracks condo sales in many of Boston’s neighborhoods.
As other building projects hit the market, including the Four Seasons Hotel and condominium development and Millennium Tower Boston, average prices will float even higher, said Debra Blair, the president of LINK. Luxury units in Boston sell for between $1,000 and $1,500 per square foot, Blair said. But in another year or two, they will probably be between $1,500 and $2,000 a square foot, she said.
“We’re expecting a new normal,” Blair said.
Millennium Tower Boston, a downtown condo tower with 442 units selling for $850,000 and a penthouse listed for $37.5 million, is set to open in the summer of 2016. The Four Seasons, which will have 180 luxury condos with fireplaces, is expected to fetch even higher prices in 2017, when it is scheduled to be completed.
The median price of luxury units in 2014 in Boston’s central neighborhoods climbed almost 23 percent from the previous year to $1.4 million, nearly double the increase for all condos in central Boston, according to LINK. The median condo price in neighborhoods tracked by LINK rose 12 percent to $619,000 from $555,000.
The surge in luxury market prices is another indicator of the income gap in Greater Boston. It comes as more Boston-area families stretch to make ends meet. The share of households spending more than a third of their income on housing — generally considered the threshold for affordability — has jumped to more than 38 percent from 27 percent in 2000, according to the Greater Boston Housing Report Card prepared by the Dukakis Center for Urban and Regional Policy at Northeastern University.