bostonbubble.com

gdma · Guest

Hey we don't have a most overpriced property thread.

http://www.redfin.com/MA/Hudson/6-Hummock-Way-Sauta-Farm-01749/unit-40/home/28577459

I was horrified when I saw this one today. Don't tell me this isn't seller trying to cheat a buyer. 480K+ for a 55+ condo in Hudson (207psf) that doesn't look in any way spectacular, and is not even brand new so the buyer can benefit from some customizing. I gauge this to be a 360K property at current metrowest prices, and it really should be 180K when you take the whole of USA into perspective.

What's wrong with the people in greater boston, that someone will list properties so high, and worse, someone else will actually buy?

equityguard · Guest

CC · Guest

The sellers can always ask as high as they want or buyers can offer as low as they want, but that doesn't mean anything. Unfortunately not because they don't know the market, a lot of sellers THOUGHT they CAN"T lower their prices simply because they paid way much more during the boom. Remember just few years ago many people bought Natick Mall's condos for about one million dollars.

Usually an overpriced property just sits forever until the seller realizes the reality.

Roman B · Guest

I used to see this a lot in southern New Hampshire and Maine. The jacked up price for a home (or condo) may reflect the owner is trolling for a bite. That is, the owner has no expectation to sell for the hyper-price and is in no rush to sell, but has simply tossed something out there to see what would happen.

Boston ITer · Joined: 11 Jan 2010 Posts: 269

There's a final stash of the so-called dumb money and these are the new real estate investment pools, forming between Australia and east Asia. The idea is that groups of individuals pour their savings into trust/mgmnt companies which then buy real estate in the US, Canada, and other 1st world markets. And so if one or more of these overpriced sales actually goes through, it might encourage others to keep the high markups going for longer.

GenXer · Joined: 20 Feb 2009 Posts: 703

International REITs are for suckers. I see these ads in financial magazines all the time. Nobody in their sane mind will buy into these trusts. Its mostly for brokers to sell to unsuspecting clients.

The main question here is, what is value?

In fact, value doesn't exist. Something can be under- or over-valued relative to something else (not in absolute terms). There is no reason for gold to be $1350 vs. $3000 - this is simply what the market price of gold is. It can go up to $3k or down to $300, and while an explanation can be retrofitted, this is what happens to volatile commodities - their price more often than not does NOT follow 'fundamentals', often confounding analysts and amateur forecasters. As long as there is easy money in Boston, people will pay any price they can. As long as there are mortages and interest rates are low, people will spend this type of money. It will get more rare in time - very few can afford it. But we are nowhere near that point. As long as there is a perception that houses are worth this much, people will pay. This is called 'anchoring' - you think that the past price is 'fair' because others paid it, and no amount of analysis can convince these people. Do you really think they actually try to figure out what the right price is? I don't think most people waste time on that, even if they could have a way of estimating a 'fair' price. In any case, 'fair' has to do with anchoring just as well, because we all know based on the national prices that Boston prices are far from 'fair'. So 'fair' in relation to Boston past prices? Again, anchoring, since those prices may not have been fair to begin with. Only when money runs out will prices suddenly correct, possibly over a relatively short period of time. They may never correct. But we all know the prices are far from fair given the price/income ratio. So the question is, given these prices, how can the buyers afford them? This may be part of the 'new normal' where people think that everything they earn can go to pay for the house. This is clearly a fragile situation that is not going to last forever.

Boston ITer · Joined: 11 Jan 2010 Posts: 269

balor123 · Joined: 08 Mar 2008 Posts: 1204

[http://www.trulia.com/property/3041709795-6-Ledgelawn-Ave-Lexington-MA-02420]6 Ledgelawn Avenue, Lexington MA 02420[/url]

How about this one? Assessed at $500k. Small lot (.27acres). Only 1300sf and $410/sf. Kitchen needs remodeling. Professionally landscaped backyard, covered by snow. Would you buy this house? I think they're riding the avg Lexington stats but for a house like this you can go much cheaper (high 400s or low 500s).