Boston Luxury Developers Grapple With Unsold Trophy Condos

Developers sought to boost Boston’s luxury market with glass towers, five-star brands and resort-style amenities in recent years, but sales have fallen far short of their lofty expectations.

After a decade of builders aiming to up the market’s ante, the city is dotted with expensive, slow-moving inventory, the Wall Street Journal reported. And developers are increasingly willing to bend on price to get deals done.

At the St. Regis Residences on Boston Harbor, about 47 of the building’s 114 condos remain unsold years after the project launched. Developer Jon Cronin is marketing his own penthouse — roughly 10,000 square feet with a private pool — for $49.5 million, a figure that would set a local record if it closes anywhere near ask.

The St. Regis is emblematic of a broader miscalculation. In the mid-2010s, Boston’s luxury market heated up quickly with record sales above $30 million as foreign and domestic wealth poured in and developers rushed to deliver more product.

From 2013 through 2018, roughly 1,500 luxury condos hit the market, according to Collaborative Companies. Nearly 2,500 more have followed.

But demand thinned.

Sales above $3 million in Boston’s urban core fell 35 percent year-over-year in the second quarter, according to Collaborative Companies. Overall condo sales dropped 11 percent over the same period. Inventory at the top of the market, meanwhile, has ballooned well beyond normal levels, turning carrying costs into a growing problem for developers.

Behind the scenes, developers are offering concessions — closing-cost credits, price breaks, off-market negotiations — tactics that rarely made sense when units were flying off the shelf. Sponsors have even opted to auction inventory or pull listings entirely rather than reset public pricing.

Boston’s buyer base has emerging vulnerabilities. Many affluent purchasers are tied to universities, hospitals and biotech firms, sectors shaken by federal funding cuts and political uncertainty. Higher interest rates have narrowed the pool further, while empty-nesters who once fueled demand are increasingly staying put in the suburbs.

Not every luxury project has stumbled. Boutique, branded developments with slightly lower price points, like Raffles Boston, have sold briskly, suggesting the city can still support high-end housing, just not at the scale developers once assumed.

— Holden Walter-Warner