When demand for condominiums in Boston’s Back Bay eventually exceeded the supply, homebuyers and developers began to look elsewhere. The South End, the once shabby neighbourhood that abuts Back Bay by way of the Copley Plaza shopping mall, was the obvious alternative.

First they bought on Columbus Avenue, renovating dilapidated brownstones and filling them with gleaming appliances and luxury finishes. When there were no deals left there, they ventured south to Tremont Street and set to work refurbishing its rundown buildings. High-end clothing boutiques, hip home design stores and gourmet eateries followed and, today, it’s clear that the South End has been “discovered”.

Savvy Bostonians in search of a home have started to look even further afield. Their latest focus is SoWa – the series of parallel streets “south of Washington”, including Washington Street itself as well as Harrison Avenue and Albany Street.

“You have a few people moving down there, then a few restaurants opening up, then a few more people who realise that this is a hot neighbourhood, where they can still get a pretty good deal,” says Joe Schutt, an agent with Gibson Sotheby’s International Realty. “It’s a chain reaction. SoWa is what I consider the gritty part of the South End that’s become a Cinderella.”

John Keith, an independent real estate broker who has worked in the South End for six years, agrees. “It’s becoming a neighbourhood where you can get out of work on Friday and stay there all weekend long – go out for drinks with colleagues, meet up with friends for dinner and do your Saturday shopping.”

The push south out of the city centre has been helped by Boston’s strict regulations on building height, he adds. “There’s a lot of pressure to build out, not up,” he says. “SoWa benefits from that because it’s basically an extension of the South End.”

Kelly Robbins, a twentysomething newlywed, has rented in SoWa for a year and will next month close on the purchase of a loft-style condo. “We wanted to try the neighbourhood out first because we had a little uncertainty buying in an up-and-coming area but we just fell in love with so many things – the art galleries, the design stores, and there’s a new restaurant opening every time you turn around,” she says.

The neighbourhood’s ascendancy is a relatively recent phenomenon. Even just a few years ago the notion that it would be a destination for a night of fine dining and chi-chi bar hopping, let alone a safe place to live, would have been laughable, says Dave Costello of ERA Boston Real Estate Group. “I would never have gone down there. It was largely a low-income, industrial, commercial area,” he explains. “But now my wife and I love to go out for tapas there, my favourite bakery is in SoWa and even my barber is there.”

Tortillas and trims aside, perhaps the biggest reason prospective buyers have become interested in the area is that they can get a lot more for their money than in other parts of the city, says Megan Kopman, a former commercial real estate lawyer who is now a SoWa-based broker with Ballast Realty Group. “I deal with a lot clients who come in and say: ‘I am all about traditional Boston. I want an historic brownstone in the Back Bay or the South End proper,’” she says. “But $1m in those neighbourhoods gets you maybe 1,200 sq ft in a walk up and, if you’re lucky, one parking space. In SoWa, for $1m you can get 2,600 sq ft and two garage parking spaces. People see right away that it’s a better deal.”

If recent trends continue, SoWa will not be a bargain for much longer though. Because the area is so new to the residential real estate market, long-term pricing history is difficult to come by. But according to figures from Multiple Listing Service, in January 2002 the median sale price of a 1,000 sq ft, two-bedroom, two-bathroom condominium on Washington Street was about $470,400. This January that same condo’s median sale price was $578,250 – an appreciation of about 22 per cent. According to property listings, the sale price of one particular 974 sq ft condo with two bedrooms, two bathrooms and deeded parking on Washington Street jumped from $460,000 in 2002 to $668,999 last month.

To put these figures into context, over the past six months on Marlborough Street – the heart of the upmarket Back Bay – the average price per square foot for a condominium was $719, whereas 10 years ago it was $333, according to LINK, the Boston-based Listing Information Network. Condos in SoWa have averaged $540 per square foot over the past six months but 10 years ago they averaged $147 per sq ft.

Another reason prospective buyers are gravitating to SoWa is its artistic atmosphere. A former mill building district where pianos, canned goods, shoes and other merchandise were made in the 19th century, the area has for the past 50 years been home to artists’ studios carved out of the old factories. And in recent years it has begun to emphasise its status as a creative hub. On the first Friday of each month, for example, local artists and others open their studios at 450 Harrison Avenue. In the spring there is an “art walk” weekend, during which more private studios are opened to the public. That event also marks the opening of the seasonal, open-air SoWa market, where craftsmen, farmers and other vendors sell their wares. And in December there is the annual holiday market, where New England artisans convene to show off their jewellery, pottery and home decor. “There’s starting to be a real sense of community there and people are drawn to it,” Costello says.

Accessibility is also important. Aside from its proximity to Back Bay and the South End, SoWa is a 15- to 20-minute walk from the financial district and a quick car ride from Cambridge, all of which makes it appealing to young families and urban professionals. The neighbourhood is also attractive to those who commute out of the city since it is surrounded on one side by the Mass Pike motorway and also conveniently located for Route 93. It will become even more convenient once the Silver Line, a rapid bus line that will run throughout the city by 2013, is completed.

In addition to investors looking for long-term appreciation, those snapping up condos in SoWa are primarily young, first-time homebuyers such as Robbins, Costello says. “It’s people who want to stay in Boston proper but can’t quite afford a two-bedroom in the South End, so they sacrifice a bit on the location for more square footage.”

The types of residences available in SoWa – mainly lofts and loft conversions – are “perfect for this kind of buyer”, he adds. “Interiors do not typically have the level of finishes you’d see on other developments [but most newcomers] look at the condos in SoWa as blank canvases. They don’t want to buy a developer’s finish. That might feel too corporate or too plain vanilla.”

Instead the look is “modern, contemporary” with exposed brick and beams. “There are no crown mouldings; the bathrooms have clean lines, not marble. The floors are either restored wood or polished concrete.”

Of course, not all of SoWa’s buildings are swanky yet, which has so far proved a deterrent to some families.

“It’s a diverse neighbourhood,” says Schutt, “and it always will be. You’ve got a women’s shelter right next to $1m loft conversions; you’ve got a low-income housing project adjacent to a luxury building. It’s still rough around the edges.”

But, he adds, it’s a neighbourhood for “urban pioneers. In the next five years, I predict people will have no problem walking anywhere around Harrison.”

Robbins agrees. “When you buy in a developing neighbourhood, there’s always little bit of uneasiness because it could turn either way,” she says. “But I do feel like we got great value and I am looking forward to seeing what else pops up.”

Local agents

John Keith, tel: +1 617-470 6839; www.bostonreb.com

Gibson Sotheby’s International Realty, tel: +1 617-833 3376; www.KerryAndJoe.com

Ballast Realty Group, tel: 617-275 5811; www.ballastrealty.com

ERA Boston Real Estate Group, tel: +1 617-262 1900; www.bostonrealestate.net