Metrics matter. There are two ways to calculate 'the most expensive neighborhoods' in Boston. One is by the average asking price – basically, if one neighborhood averages $800,000 but another is just $300,000. The other approach is measuring the average price per square foot.
Why does this matter? The first approach doesn't take into account the different types of housing product. For example, while two neighborhoods may both have an average asking price of $600,000, in one neighborhood that may buy a 2,000sq.ft. house ($300/sq.ft.), but only a 600sq.ft. condo ($1,000/sq.ft.) in the other. In order to give a meaningful comparison of the price of a built square foot across neighborhoods, the preferred metric at NeighborhoodX is price per square foot.
Within the city of Boston, the most expensive neighborhoods on a per-square-foot basis are Back Bay, Bay Village, Beacon Hill, Fenway-Kenmore, Financial District, Seaport, South End, Theatre District, and the Waterfront. These neighborhoods consistently average over $1,000/sq.ft., and in some cases much higher.
It is worth mentioning Chestnut Hill here, which is a neighborhood that spans Boston, Brookline, and Newton. On a per-square-foot basis, it is also among the most expensive in greater Boston.
We're going to math you out for a moment longer. One of the reasons that our charts look different than most other marker reports is that we report not just the average price per square foot, but also the price range within the neighborhood to identify the most and least expensive properties on a price/sq.ft. basis. Why? Let's imagine two neighborhoods with the same average price of $1,000 per square foot. One might have a tight range of $900-$1,100, while the other ranges broadly from $600-2,000 per square foot. This suggests very different housing types and market conditions. As a result, the price ranges add context that would be hidden if we just looked at the average by itself.
New condo developments drive up average prices for a neighborhood. In greater Boston, two of the most expensive neighborhoods barely existed ten years ago. The average asking price in the Seaport is, some months, higher than than of Beacon Hill, and the new Assembly Square condos have higher average prices than those in historic Harvard Square. This is because these two new neighborhoods have only one housing type – new, luxury condominiums – and as a result, this would only occupy the upper end of the price range in any more established neighborhood. Instead, in these neighborhoods, it represents the entire price range. Also, historic neighborhoods have a diversity of pricing that reflects the diversity of housing types, from townhouses to tiny condos and converted carriage houses.
That said, while the average asking price in these new neighborhoods is driven up by the concentration of new condominiums, the upper end of the price range in the historic neighborhoods is much higher than that in these new neighborhoods. At the upper end, prices for Back Bay ($3,800/sq.ft.+) and Beacon Hill ($2,600/sq.ft.+) condos are higher than the most expensive prices in Seaport ($2,000/sq.ft.).