Roaring South End is Untamable
Boston’s South End has been evolving for decades but has often been overlooked by the Back Bay. Once a mix of classic homes and seedy streets, its borders have expanded over the years with redevelopment and urban growth. Today, many homes have been either returned to their original elegance or surpassed them entirely. The South End has been a premier submarket and quintessential “Boston” neighborhood with its brick sidewalks for years, but the pace of change in recent years has been rapid and dramatic.
The largest intact Victorian-style row house neighborhood in the US, the South End is an esteemed cultural, retail as well as residential destination that has seen a surge in new developments primarily at Ink Block, an 8-acre parcel previously home to the Boston Herald HQ.
South End has a hyper-competitive “For Sale” market, with the average sale price fetching $1,276,000, reaching $1,056 per square foot, just behind Back Bay, Beacon Hill, Downtown and the newly constructed Seaport. As of June 14, there were 81 condominium units listed for sale in the entire submarket, and of the 49 units placed under agreement in May, they were on the market for only 21 days, on average. Not only is inventory extremely limited in the South End, but transactions are moving expeditiously.
In Q2 2018, the median condominium sale topped $1,050,000, up 13% since last year. The average sold price per square foot for a one-bedroom was $1,025, increasing 8% YOY; for a two-bedroom, $1,058 PSF, growing 7% YOY; and, for a three-bedroom, fetching the highest price-per-square-foot at $1,102, with a 3% growth since 2017. Besides recently completed Siena, 88 Wareham is slated to deliver 27 premium condominiums by late 2018, adding much-needed inventory to the constrained market.
- In April 2018, Penthouse 810 at Siena closed for a whopping $1,606 PSF
- In March, 17 Cazenove, Street, Unit 202, a brick building with spectacular views of the Back Bay closed for $1,582 PSF
- In March, 28 Union Park, Unit A came under agreement for $1,417 PSF
With modern upgrades, the classic brick buildings in the South End are just as expensive as new developments in Fenway, such as Pierce Boston.
Unlike other markets such as Charlestown, where one-bedrooms are 18% more expensive than three-bedrooms, the opposite is the case in the South End, where three-bedrooms are 7% more expensive on average. Since 2013, there has been a bidding war for one and two-bedrooms in the South End, further exemplifying the hyper-competitive housing market sparked by the lack of supply. To counteract this, many landlords across the city are converting their existing apartment inventory into condominiums, as seen at Millbrook Lofts and 63 Melcher Street.
Ink Block, a massive mixed-use development has set a vision of “place-making” for other development projects of its kind; by bringing together residents in a community by offering prime retail, and a wide range of amenities, Ink Block has paved the road of building cities within cities. With 1,278 apartments and 159 condominiums, Ink Block has been a leading catalyst in fueling Boston’s multi-family boom.
Furthermore, the development, 7INK by Ollie, a full service, co-living development will add 245 micro-studios into the market by 2020. This one-of-a-kind project will give tenants the ability to rent on a per-month basis.
In the rental market, recently completed, 345 Harrison Avenue is asking $5.46 PSF, on-par with developments in the Seaport. Troy, asking price of $2,916 for a one-bedroom is fetching $4.89 PSF sets itself apart from other comparable developments in emerging markets by its prime location to the Financial District, compared to developments such as The Eddy in East Boston, which is currently asking $2,837 for a one-bedroom, at $4.62 PSF.
Location in real estate has always been a paramount driver, and the South End is unique in its proximity to downtown, but the lack of great public transit options have given tenants the ability to live further out while being on the ‘T.’ As the definition of the South End expands, or at least as developments extend into the fringes of the South End where there has never been housing, will this pricing continue to hold?
Ink Block’s success has certainly indicated the potential, but even though it was on a long-neglected site, it’s proximity to Downtown suggest people will pay a premium to be where the action is.