The Boston Herald is reporting today that The Clarendon project in the Back Bay (rendering of lobby above) has not put a unit under agreement since mid-September, about the time of the beginning of the financial crisis:

Barbara Cusack, the Clarendon’s sales director, acknowledged that she has not put a unit under agreement since mid-September.

“It’s not the building and it’s not the location - it’s the economic climate,” she said. “People are looking but they’re afraid to put money down, because everyone is nervous.”

The Clarendon is a 103 unit luxury condo development project at the corner of Clarendon and Stuart Streets (across from the Orange Line Back Bay T stop) with prices ranging from $695,000 to $4 million.  Approximately 25 of the units are currently under agreement. 

My take is that not having a buyer under agreement since September is a concern, not just at the Clarendon, but across the Boston real estate market.  The high end segment of the market has remained very strong for the past several years (throughout the real estate market slowdown) so a change now is interesting.  Clearly it is directly related to the financial crisis.  Those buyers who can afford the ultra-lux projects were the ones most directly impacted by the crisis first.  Lots of wealth evaporated quickly and confidence in the market and job security is very low.  No surprise that sales have slowed down.

That being said, the project just had its "topping off" ceremony and completion is not expected until Fall 2009, so having 25% of the units under agreement at this point is solid sales performance in my view.  I am not privy to their internal projections or goals but I suspect they aren't far off what they were shooting for.  There may be a tough road ahead for them though as the economic situation, shall we say, develops.

With a lack of confidence in the economy, fewer and fewer people will be willing to plunk down a substantial investment for a down payment on a property that is still a year away from completion.  Keeping cash on hand is the first choice for many now.  But The Clarendon is a desirable property built by developers with a good reputation (Related Co. and Beal).  It's a great location and has great amenities so it will sell out - it just may take a little longer than anticipated. 

How this news bodes for the rest of the Boston market is something I will be keeping a close eye on.