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Glut of high-priced homes?
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Richthofen



Joined: 02 Apr 2014
Posts: 69

PostPosted: Wed Feb 10, 2016 4:45 pm GMT    Post subject: Glut of high-priced homes? Reply with quote

While inventory of homes considered affordable or even mid-range in price is incredibly low, I'm seeing a huge supply of expensive homes, 1 million and up, in prime neighborhoods. Brookline, Boston, Newton, Belmont, Wellesley, Weston... Especially Wellesley, which is averaging over 100 days on market and 78 homes over $1 million. (Compared to just 3 under $1 million). Now, I know those are richer towns but it seems like if you are in the market for luxury real estate you've got plenty to choose from. How long can wealthy people keep those homes on the market before cutting prices? Are falling stock prices going to impact home sales at those prices?

Any thoughts on the bifurcated market, and whether high end homes are in a bubble?
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PostPosted: Fri Feb 12, 2016 4:55 pm GMT    Post subject: it is not a bubble until it pops Reply with quote

I am not good at bubble theory, but I am one of many who can not afford 1 million dollar house currently, period.

With the minimum wage targeting $10+ per hour, I believed the ideal situation of the government is, waiting for wage to slowly catching up with the already inflated asset prices. That doesn't mean there will be no 'black swan' appear between ideal and reality goal.

Again, the goal of the policy is to maintain housing market stability, instead of promoting affordability, got it?
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admin
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Joined: 14 Jul 2005
Posts: 1817
Location: Greater Boston

PostPosted: Fri Feb 12, 2016 5:22 pm GMT    Post subject: Re: it is not a bubble until it pops Reply with quote

Anonymous wrote:

Again, the goal of the policy is to maintain housing market stability, instead of promoting affordability, got it?


I'm inclined to think that the policy goal is to enrich the FIRE industries - i.e., welfare for Wall Street. That's the end result of it, anyway. If stability were the goal, they would presumably want to lean against bubbles as bubbles increase instability. Policy instead contributed to the great housing bubble last decade.

- admin
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PostPosted: Fri Feb 12, 2016 7:06 pm GMT    Post subject: Reply with quote

Quote:
Policy instead contributed to the great housing bubble last decade.


The Policy promoted individual spending by inflating housing market back from 2002 to 2006. Someone needed to boost up economy, in order to justify financing a war. A lot of financial aftershocks we were experienced and still experiencing sourced from that mother of all evils.
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RennyD
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PostPosted: Sat Feb 20, 2016 2:30 am GMT    Post subject: Reply with quote

Just curious. What are people on this message board looking to spend on a home in suburban greater Boston?
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PostPosted: Sat Feb 20, 2016 12:44 pm GMT    Post subject: Reply with quote

RennyD wrote:
Just curious. What are people on this message board looking to spend on a home in suburban greater Boston?


I'm looking for $700K - $900K.
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RennyD
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PostPosted: Sun Feb 21, 2016 2:32 am GMT    Post subject: Reply with quote

I live in Boston and don't know anything about the suburban market.
That's a lot of money. Is there not good inventory in that range?
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PostPosted: Sun Feb 21, 2016 12:30 pm GMT    Post subject: Reply with quote

RennyD wrote:
I live in Boston and don't know anything about the suburban market.
That's a lot of money. Is there not good inventory in that range?


There's not a lot in that range period, good or bad. What does exist is usually not good. The situation gets better the further you're willing to commute, but I guess I haven't expanded my search far enough for that to help yet.
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Richthofen



Joined: 02 Apr 2014
Posts: 69

PostPosted: Mon Feb 22, 2016 1:54 am GMT    Post subject: Reply with quote

My wife and I's budget is $550K. One income at $134K annual salary. Hard part is coming up with 20%. We might be able to up our budget if we could afford 20% DP on those values. Takes a long time to save $120K DP.
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PostPosted: Mon Feb 22, 2016 2:27 am GMT    Post subject: Reply with quote

Richthofen wrote:
My wife and I's budget is $550K. One income at $134K annual salary. Hard part is coming up with 20%. We might be able to up our budget if we could afford 20% DP on those values. Takes a long time to save $120K DP.


I've got the opposite problem (I'm probably a lot older). I can make a big down payment, but income can fluctuate year to year, and banks appear to loan based on income once you pass 20%. I want to wait for viable inventory to materialize but that introduces the risk that I'll have an off year for income.
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PostPosted: Tue Feb 23, 2016 2:23 pm GMT    Post subject: Reply with quote

RennyD wrote:
Just curious. What are people on this message board looking to spend on a home in suburban greater Boston?

$750K. We have a combined income of $215K/year now, $260K/year starting in April. So our budget will increase a little.
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PostPosted: Tue Mar 01, 2016 10:00 pm GMT    Post subject: Reply with quote

In decent towns around boston, $900k is the starting price for houses that start to look appealing. I am totally disgusted by the current home price. But looks like home price would get more expensive in the near future. Usually tide turns after election, so let's revisit this at the year end. Rolling Eyes
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RennyD
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PostPosted: Wed Mar 02, 2016 3:15 pm GMT    Post subject: Reply with quote

Is that true? A price drop after an election.
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bsg61
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PostPosted: Wed Mar 09, 2016 9:30 pm GMT    Post subject: Reply with quote

I am looking for a condo, as I am a single woman and not interested in owning/paying for/taking care of a single family house without a partner. Would also consider a two family with a partner but I hear those are hard to come by and are quite expensive. Originally I thought I would like the condo to be under $300K but the reality is there is very little in that price range, so I've increased to $400K.

Single family house budget (hypothetically speaking with a partner) would probably be under $650K.

It seems this upward trajectory in prices cannot continue without a correction at some point.
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Richthofen



Joined: 02 Apr 2014
Posts: 69

PostPosted: Wed Mar 09, 2016 9:39 pm GMT    Post subject: Reply with quote

bsg61 wrote:
I am looking for a condo, as I am a single woman and not interested in owning/paying for/taking care of a single family house without a partner.


Be careful. I bought a condo in 2006 and short-sold in 2011.. remember you have no control over who else buys a condo in your building. Its essentially a business partnership where the business partner can sell his/her interest at any time and be replaced by an unknown quantity. I had TERRIBLE neighbors move above me. I have friends who own half a two family in Belmont, and their upstairs neighbor rents to a VERY crazy individual.

Condos are fine but tend to be harder to sell in the future. That's why we are restricted to SFH.
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