SalemNews.com, Salem, MA

July 18, 2012

A hot commodity

BY ETHAN FORMAN, STAFF WRITER
The Salem News

---- — SALEM — The condominiums at 315 Essex St. were beautiful — cherry wood cabinets, inlaid wood floors and a downtown location in the McIntire Historic District. But they’d been on the market for nine months and weren’t selling.

The developer who’d converted the building into condominiums finally called it quits and sold it to local real estate agent Betsy Merry, president of the 3-year-old Merry Fox Realty.

When she put it back on the market this spring, it was an entirely different story.

She and business partner Dan Fox had all six units under agreement in two weeks.

It appears they were helped by a pent-up demand for affordable, quality housing and the desire to take advantage of what a small city like Salem has to offer, real estate agents say.

In fact, there’s been something of a surge in demand for condos in the Witch City. In the second quarter of this year, 70 condos were sold in Salem, compared with 61 during the same period last year, according to Multiple Listing Service data.

“An even more impressive statistic is the number of condos that went under agreement during the second quarter of 2012 versus the second quarter of 2011,” Fox said.

During April, May and June, 93 condos were under contract in Salem, up from 68 during the same time period one year ago — a 37 percent increase, Fox said. These numbers include condos that were sold, as well as those under agreement but that had not yet closed.

With asking prices of $250,000 to $380,000, and fees of $160 to $235 a month, The McIntire, as the Essex Street condominium building is dubbed, attracted a range of buyers: a young professional who works at a Boston hospital and plans to walk to the train, an airline pilot, a scientist with a teenager. One of the buyers lives in Boston and wanted a second home.

While the market was brisk, prices for condos in Salem were also on the rise this spring. The median price was $220,000 in May, up 2.5 percent from the same month a year ago, according to The Warren Group.

In fact, statewide, the median condo price of $290,000 in May was slightly higher than that for a single-family home, The Warren Group said. This was due in part because of a lack of condos on the market and a number of lower-priced, single-family homes being sold.

“The market as a whole has improved in terms of prices,” said Terryanne St. Pierre of Tache Real Estate in Salem. A condo at 35 Flint St. that was on and off the market last year would not sell at $199,000. After a six-month break in which the unit was taken off the market, St. Pierre said the property was listed at $203,500.

“We actually sold it in a week to a cash buyer,” she said. Prices are inching higher with a lack of inventory of condos to sell, she said.

So what is going on in Salem to make it attractive to condo buyers?

Merry and Fox said condos are selling well because buyers want to be near the city’s cultural attractions, museums and restaurants.

“They want that European lifestyle you are not going to find anywhere else” on the North Shore, said Merry, who lives in the city herself.

Buyers who may be priced out of Boston aren’t priced out in Salem, St. Pierre said.

“I think there is a trend to affordable city living,” she said.

There may also be a demographic shift at play of people moving to cities, though it’s hard to say whether Salem is directly benefiting from this or has simply become an attractive place to live.

According to a Brookings Institute study, for the first time since the 1920s, “the nation’s largest metropolitan areas grew faster than their combined suburbs.”

While cities are proving attractive, Merry and others say Boston is financially out of reach for many young professionals who want the urban lifestyle.

“People are looking at Salem as an alternative to downtown Boston, Brookline and the Somerville area,” said Rinus Oosthoek, executive director of the Salem Chamber of Commerce.

Salem’s restaurants, many of which now offer outdoor seating, are proving to be a draw, and amenities like the popular farmers market in Derby Square on Thursdays make living downtown more interesting.

“The farmers market is where the new Salem and old Salem are combined,” Oosthoek said.

What is surprising to Oosthoek about the strong Salem condo market is that it defies the conventional wisdom that many young people prefer to rent, so they are not tied down to one place. With its increasingly vibrant downtown and easy access to Boston, he said, the city is appealing to the young, as well as to older, retiring couples moving in from “the boonies.”

“You want to be able to walk and bike to the train station and be a part of it,” he said.

Staff writer Ethan Forman can be reached at 978-338-2673, by email at eforman@salemnews.com or on Twitter at @DanverSalemNews.