Boston’s booming condo market; Chicago’s flight to the suburbs; Foreign investment flows into Houston; and San Diego’s downtown revival

National market report

Feb.February 01, 2016 11:00 AM
Fallon Co.’s luxury condo project, 22 Liberty, has sold 102 units at a median price of $2.8 million.

Fallon Co.’s luxury condo project, 22 Liberty, has sold 102 units at a median price of $2.8 million.

Boston

The condo market in Boston reached record highs in 2015. The median price for condos in nine downtown neighborhoods, along with South Boston and Charlestown, rose nearly 10 percent to $680,000, according to real estate data firm LINK Smart. Meanwhile, prices for luxury condos rose roughly 20 percent to a median of roughly $1.8 million — an equivalent of nearly $1,200 per square foot. “It’s almost as though we’re approaching Manhattan prices,” Debra Taylor Blair, president of LINK, told the Boston Globe. “Demand for urban living is high.” Much of that demand is being fueled by empty nesters and foreign investors, the newspaper reported. A high-end condominium project called 22 Liberty in the Seaport District, which was developed by the Fallon Co., has sold 102 units at a median price of $2.8 million. One issue driving up prices is supply. Although the city is undergoing a construction boom that’s redefining the skyline, most of the new buildings are rental apartments, not condos. “These are long-term trends,” Blair said. “The urban lifestyle is commanding a premium.”

Chicago

There’s a flight to the suburbs in Chicago and it’s not because the city is getting seedy. As rents and home prices escalate, once-enthusiastic urban dwellers in the Windy City are being forced to move to less expensive suburbs, the Chicago Tribune reported. The median price of a home sold in Chicago for the first 11 months of 2015 was $263,500, according to data from the Illinois Association of Realtors. While that might seem low — it includes all properties within city limits — it’s a 6.4 percent jump from the prior year. But around 20 miles west of Chicago, the median home price for a detached single-family home in the city’s suburbs can be half or a third of those in trendy city neighborhoods. “You could stay in the city if you had any amount of money, but that’s not most people,” Tracy Anderson, an agent with Berkshire Hathaway HomeServices KoenigRubloff Realty Group, told the Tribune.

Houston

Foreign investment is continuing to pour into this Texas city even as a slump in oil prices has led to layoffs in the city’s key industry. Last year, foreign investment in commercial real estate in Houston more than doubled to $1.7 billion, with trophy buildings still attracting overseas interest, the Houston Chronicle reported. In 2015, German realty fund manager Union Investment purchased downtown’s 36-story Class A office building 1000 Main for $440 million, or $525 per square foot — one of the city’s biggest-ever deals. Meanwhile, a Spanish private investment firm, Masaveu Post Oak Houston Delaware, purchased 2200 Post Oak Boulevard, a 326,200-square-foot office building, for an undisclosed price. Back in 2011, the 29-story Hess Tower sold for a record-breaking $442.5 million to Toronto-based H&R Real Estate Investment Trust. Since 2014, thousands of workers have lost their jobs at Houston’s big oil firms as oil prices have plunged.

San Diego’s downtown is experiencing a major revitalization.

San Diego’s downtown is experiencing a major revitalization.

San Diego

In a trend that stands in contrast to Chicago, San Diego is experiencing a flight away from the suburbs and into the city. The city’s once-seedy downtown is experiencing a dramatic makeover. Developers are feverishly building new offices, hotels and more than 9,000 apartment and condo units, the Wall Street Journal reported. Bosa Development is erecting a 41-story, 215-unit luxury condo building, which is expected to hit the market soon with prices for one to three-bedroom units starting at $1.4 million. Since 2000, the population of downtown San Diego has grown a massive 76 percent to 30,800 residents. “We’re seeing a real flight out of suburbs like Rancho Santa Fe because of the lack of walkability and the high cost of maintaining those estates,” Brad Termini, the co-CEO of Zephyr, a San Diego-based developer of high-end housing, told the Journal.

Atlanta

Filmmaker and playwright Tyler Perry is struggling to offload his $25 million estate, which sits on 17 acres along the Chattachoochee River. The 35,000-square-foot property, which was listed six months ago, has lavish amenities including a personal theater, tennis court, fully-equipped gym and an underground ballroom with a catering kitchen. Perry bought the land for $9 million and built the mansion in 2007.

Los Angeles

Hugh Hefner is shopping his legendary Playboy mansion for at least $200 million. But buyers should note one important caveat: Hefner doesn’t want to move out and must be able to live in the home as a condition of the sale. Built in 1927, the six-acre Holmby Hills estate is currently the most expensive existing house on the market in the country (see story on page 58). Hefner bought the property for just over $1 million in 1971.

Mercer Island, Washington

Microsoft co-founder Paul Allen has purchased a $5.4 million estate on Mercer Island, bringing his total tally of homes on the island to 11. The 3,320-square-foot bungalow was built in 1948. The tech geek, whose net worth has been estimated at $18 billion, lives in a 10,000-square-foot waterfront home on the island that features its own helipad and concert hall. The other homes are used as guest houses, including one just for his mom.

Malibu

Trainwreck” and “Knocked Up” director Judd Apatow and his wife, actress Leslie Mann, have listed their 2,500-square-foot Malibu beach house for $12 million. The Hollywood power couple bought the 1930s three-bedroom, three-and-a-half-bathroom property from “Pretty Woman” producer Laura Ziskin for $10.8 million in 2013. The beachfront pad features a wall of windows and extensive Pacific Ocean views. The listing touts yet another bonus — it’s within walking distance of a SoulCycle.


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