Tiny condos fetch hefty prices in prime Boston spots
After renting for four years, Maggie Crowley is about to join the ranks of Boston homeowners. Her new digs: a snug 297-square-foot studio in the Back Bay. The price: a hefty $366,000.
Crowley, a 30-year-old business development officer with a payment technology firm, said the cost to rent or buy a bigger place in the city is out of her reach.
“I don’t spend that much time in there. I spend much of the time working and traveling for business and out enjoying the city,” said Crowley, who hopes to live in the condominium for a few years, renovate, and eventually rent it out or sell for a profit. “It’s a place for right now and an investment.”
Buyers like Crowley are driving up prices on the smallest condos in Boston’s most sought-after neighborhoods, with increases outpacing those for more spacious units, according to data to be released Thursday by LINK, a firm that tracks sales in a dozen central Boston neighborhoods, including the North End, Seaport, Back Bay, and Fenway.
Units of 450 square feet or smaller fetched an average of $358,389 in the second quarter, up 14 percent from a year earlier and 54 percent from the same quarter in 2011, according to LINK.
That’s more than the median price of a single-family home in Massachusetts, $320,000. The average price of condominiums larger than 450 square feet has increased by 36 percent since mid-2011.
Nearly 50 of the small units were sold in the central Boston neighborhoods last quarter, a 36 percent increase from a year earlier. Citywide sales of all condos fell 8 percent to 890 transactions, according to LINK.
Low housing inventory and the appeal of living in Boston are behind the growing appeal of the mini condos, said Debra Blair, president of LINK.
“Buyers are willing to pay top dollar just to get in,” she said.
The average price of a condo in the Boston neighborhoods LINK tracks topped $920,000 in the second quarter. The median price rose 15 percent to $692,000. (At the median price, half the units are more expensive and half are less expensive.)
While some super-small condos have long been scattered throughout the traditional brownstones in the Back Bay, developers are including them in new construction along Boston’s waterfront, too.
The city has allowed units of 450 square feet or smaller in the Seaport district as long as the buildings have enough shared amenities, such as a lobby or roof-deck space. Nearly 200 such apartments are planned.
And Yotel, a London hotel chain that specializes in tiny, low-cost rooms, plans to build a 326-room hotel in the Seaport district.
It’s unclear how high the demand will be when more of these teeny units hit the market, said Timothy M. Warren Jr., the chief executive at Warren Group, a real estate information service. “These things are a different ballgame,” he said. “There’s some market. I don’t know if you can sell 1,000 a year.”
For now though, Sarah Glovsky, a real estate agent with The Charles Realty, said she is seeing multiple bids and high demand for many of these small units from first-time buyers, investors looking for rental income, and suburbanites seeking a pied-a-terre for weekends in Boston.
Last month, Glovsky helped sell a 280-square-foot studio in the Back Bay for $410,000.
“Anybody who wants a nice property in that location has been paying a premium price,” Glovsky said. “You don’t need a six-burner range when they can walk out the door and have a city full of restaurants.”