As I mentioned last week, I’m reading “The State of the Nation’s Housing 2011” Report from the Joint Center for Housing Studies of Harvard University.  It is a terrific read and I encourage everyone to read it.  Throughout the report, it makes a point to differentiate between housing markets which is important because the Downtown Boston condominium market is contrarian to the national, state and even the “Greater Boston” market. Here are two great points from the report:

“Local housing markets will revive at different rates, in proportion to the depths they hit during the recession, the amount of overbuilding that occurred, and the speed at which job growth resumes.”  (Page 5)

“Low interest rates and weak prices have made homeownership more affordable than in decades. Several strong months of private sector job growth in early 2011 provide encourage signs of a housing market rebound. With inventories of new homes at historic lows, a turnaround in demand could quickly result in tighter markets.” (Page 11)

These comments relate to our market because:

• The Downtown Boston condominium market held, for the most part, during the recession and is now seeing a hold/increase in prices. 

• Due to a lack of land and stringent permitting process, no overbuilding occurred here subsequently, Downtown Boston does not have that glut of inventory other markets are experiencing.

• Job growth has been occurring consistently in Massachusetts during the last five months and unemployment is now at 7.6% for the state compared to the national rate of 9.1%.  Boston’s rate is 6.9% notably lower than the state and national rates which speaks to the stronger local economy due to our diverse mix of industries.

• We currently only have a few new developments on the market today (Battery Wharf, The Residences at W Boston, Clarendon and 45 Province to name a few) and zero condominium projects in the pipeline.  I foresee inventory levels dropping and a tightening of our market which will cause upward pressure on pricing which I’m starting to see at the very high-end of the market.