$1 MILLION DOESN’T BUY WHAT IT USED TO

So the top few percent are living in what I would consider to be a starter house….and they’re doing it willingly?! I’ll bet these little villas are still using standard fuse boxes with a two wire/no ground electrical system too. I’ll all but guarantee you their attics are full of asbestos/vermiculite as well. This is insane.

We have two developments one that closed out and one that is almost finished, the average sale price almost $1.4 and $1.5 million per unit. These are very nicely appointed attached and free standing type condominiums. No problem selling at these prices. in one of the towns it is no where near the top of the market. It is surprising how many people are putting in backup natural gas generators.

A friend of ours who had purchased their home in 1988 in our south shore town at about $170,000 sold it recently for over $700,000, granted they put in a number of improvements. Massachusetts tends to be expensive, but I wonder how long the market can sustain these inflated prices. What was very noticeable was during the last bubble the less desirable areas inflated the most and dropped the most precipitously, while the higher end areas held most of there inflated values, and have since gone on to surpass the previous high water marks.

The rents are no better, as they are very high in the greater Boston area. Of course competing with people with section 8 vouchers does not help. Funny thing some towns have a glut of affordable housing for purchase because people at the lower end of the market do not have the income, savings or credit to afford even these lower priced homes. It seems people who bought 20 plus years ago and did not take all the equity out, really rich and really poor people are all right, but nearly everyone else is screwed.

Bob.

Admin,
The majority of our buyers are cash purchases. I would say 30% to 40% own at least one other home of equal or greater value. Mitt Romney built in one of our developments (has since sold) and he was not nearly the richest home owner in the project. I think most who take out a mortgages in our projects do so as a financial/ accounting move not because they need the money for the purchase.
Bob.

You can still get a nice house in Massachusetts in an upscale area for $1,000,000, but the taxes will kill you. I believe the top 6 or 8 average over $1,000,000.

http://www.wcvb.com/money/50-most-expensive-towns-in-massachusetts/27474148

This is from last summer I think Wellesley it at the top of the list now. Some very nice liberal addresses.

Bob.

Massachusetts Most Expensive Listings:

http://www.zillow.com/ma/expensive-homes/

We are pikers next to NYC and LA.

Bob.

Those houses around LA look very similar, the only difference is who lives in the neighborhood. I believe that has an impact on the selling price.

Prices in the AV, north of Awesome Town are floating back to pre 2008 levels, which would over 200K. A bargain for a bit more driving – 1 hour to downtown LA – in newer homes than those available “down below”. Most houses here were built in the late 80’s and mid 90’s. Still, most folks prefer to live and die in LA.