bostonbubble.com

news · Joined: 14 Jul 2007 Posts: 0 Location: Greater Boston

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Description: High end Boston properties allegedly "doing really well"
URL: http://www.bostonnow.com/business/realestate/2008/01/17/boston-survives
Info/Broken?: http://www.bostonbubble.com/link_info.php?id=1387

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Dorchester Grandma · Guest

No surprise here. The very rich don't have to struggle to make mortgage payments and may even pay for their homes outright. There are many, many millionaires in Boston. So what?

admin · Posted: Sat Jan 19, 2008 7:10 pm GMT Post subject:

I don't mean this to sound rude, but what are you basing that on? I have heard this before, but my suspicion is that it is a line fed to the public by those in the industry in order to get people to stretch when they buy. The premise is that you should stretch as much as you can when you buy because everybody else who is buying is rich and you therefore don't need to worry about price drops. I am very skeptical. Yes, there are some rich people in the area, but I doubt that they are so common as to make up the majority of the market. (I also question the assumption that wealth implies stability since there is a substantial amount of churn in who is rich at any given time.)

- admin

Dorchester Grandma · Guest

I assumed that if you are considering buying at the high end of the market then you probably have plenty of money to do so. I had never thought of people stretching to pay for the most expensive homes. I come into the market as a very sensible low end buyer looking to buy the best I can truly afford. Thank you for the insight!

admin · Posted: Thu Jan 24, 2008 7:12 pm GMT Post subject:

I forgot to mention another piece of this charade - labels like "high end" are used far too frequently. I have a very hard time remembering any condos not labeled "luxury" condos. Even affordable housing units get this label slapped on them. Obviously, not everything can be high end, and by definition very few things should be, but of course nearly every seller claims this status.

That reinforces the psychological game being played. "Don't worry about this condo falling in value because it's a luxury condo and we all know the high end is doing well." Never mind the disconnect between what is a luxury property in a sales pitch (just about everything) and what is actually high end when calculating what market segments are doing well. "Don't worry that you'll need to stretch to buy it since there are plenty of rich folk in the high end who will keep the demand strong and prices up." Never mind that looking at the income distribution for Boston suggests that nearly everybody needs to stretch.

Bottom line: don't feel disheartened by the article, it's just part of an elaborate sales pitch.

- admin