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Downtown-Financial District Becomes Boston’s Most Expensive Neighborhood

Key Takeaways:

  • Median home prices in Boston grew 2% Y-o-Y in the first half of 2021, reaching an all-time high of $665,000
  • Downtown-Financial District reached a $1.25 million median home sale price, surpassing Bay Village to become Boston’s most expensive neighborhood
  • Three neighborhoods crossed the $1 million median price mark
  • South Boston had the most home transactions in the city with 324 in the first half of 2021

After a decade of recovery and growth following the Great Recession, the Boston real estate market faced another challenge with the COVID-19 pandemic. Following a drop in transactions at the beginning of the pandemic, both sales and prices recovered, with the latter reaching record highs in the first half of 2021. But, while prices increased to record highs, some neighborhoods fared better than others.

Specifically, 2,477 residential sales closed in Boston between January and June 2021. That’s 57% more than the 1,578 sales in January through June 2020 — although it should be noted that the first half of 2020 included two strong initial months followed by the largest real estate dip triggered by the pandemic. As such, while the percentage is inflated by the slowdown of March and April 2020, an increase in sales volume still points toward a growing homebuyer appetite.

Simultaneously, in the first half of 2021, the median home sale price in Boston grew by 2%. In the first half of 2020, a median of $650,000 was recorded, thanks in part to the year’s strong start which compensated for the ensuing lockdown months. One year later, that record has been topped as well, as the median reached $665,000 between January and June 2021. The trend is even more evident when looking at quarterly medians, as Boston’s median home sale price in Q2 2021 stood at $682,000.

Twelve of Boston’s 21 neighborhoods saw price increases of up to 19%, while eight neighborhoods saw declines of up to 35% and in one neighborhood prices were flat.

Downtown-Financial District Reaches $1.25 Million Median Sale Price

Between January and June of 2021, median prices in Downtown-Financial District grew by 17%, reaching $1.25 million. This figure — coupled with drops in prices in other areas such as Back Bay and Bay Village — made Downtown-Financial District the most expensive neighborhood in Boston. In particular, Downtown’s luxury condo transactions — including 11 units in the Ritz Carlton complex at a $2.1 million median price — played a big part in the neighborhood’s growing price tags. Plus, its status as the heart of Boston’s financial and tech industries likely contributed. The neighborhood also logged a spike in sales volume with 73 transactions — up 55% from the 47 recorded in the first half of 2020.

Conversely, Bay Village and Back Bay — historically among Boston’s priciest areas — had medians decrease year-over-year. In the first half of 2020, Bay Village was Boston’s priciest neighborhood with a median sale price of $1.763 million, followed by Back Bay with $1.476 million. However, in 2021, median prices dropped by 35% in Bay Village and the neighborhood lost its status as Boston’s most expensive. The median sale price in Back Bay also decreased by 22%.

While the drop in median price is considerable, it can be at least partly attributed to a shift in the types and characteristics of properties being sold. More specifically, in Bay Village, the average square footage of homes sold dropped by 18% between the first half of 2020 and the first half of 2021 — from 1,421 square feet to 1,165. Moreover, two of Bay Village’s 14 home sales in the first half of 2020 were single family homes and the rest were condominiums, which had a positive effect on the median sale price. By contrast, between January and June 2021, only one out of 34 transactions was a single family home.

The average square footage of homes sold in Back Bay similarly decreased by 16% — from 1,464 to 1,237 square feet. As such, the downward trend in these neighborhoods after the record figures seen at the start of 2020 could be partially attributed to the supply of homes being sold.

Likewise, the South End also saw a drop in median sale prices, albeit by a smaller margin of 11%. As such, the median here finished at $950,000 — the fourth-highest on our list — with 268 transactions closed between January and June of this year.

Jamaica Plain Home Prices on the Rise; Hyde Park Sees Largest Percentage Increase in Median Sale Price

Jamaica Plain — situated about five miles southwest of downtown — came in as the ninth-most expensive Boston neighborhood, and was actually the only top 10 entry detached from Boston’s core around the Charles River. Here, the median grew by 13% Y-o-Y — from $620,000 in the first half of 2020 to $700,000 in the first half of 2021. The number of sales also increased by 25%.

Finally, the top 10 was closed out by South Boston, where the median home sale price reached $699,000 — down 7% Y-o-Y. However, South Boston also had the largest number of home sales in January through June of this year with 324 entries — an 82% increase from the same period last year.

Meanwhile, the overall largest percentage increase in median home sale prices was not found among Boston’s 10 priciest neighborhoods. Instead, Hyde Park took home the title with a 19% Y-o-Y spike in prices. As a result, the neighborhood reached a median price of $538,000 with 87 transactions between January and June of this year.

Methodology

Median home sale prices were calculated based on transactions that occurred between January 1 and June 30, 2020, and between January 1 and June 30, 2021. Residential asset types included single-family homes, townhouses and condominiums. All medians were rounded to the nearest thousand.

For the purposes of our analysis, Allston and Brighton were considered a single neighborhood.

Lucian Alixandrescu

Lucian Alixandrescu

Lucian is a copywriter for the CommercialCafe team. He has several years of experience as a freelance writer and is eager to learn about all things real estate and marketing. His work has been featured by publications such as The New York Times, Forbes and The Business Journals.