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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: nextrade! who wrote (3625)	7/28/2002 7:51:02 AM
From: nextrade!	Read Replies (2) \| Respond to of 306849

Millionaire next door, Boston boston.com By Steven Syre, Globe Columnist, 7/28/2002 Once I lived in a wonderfully rustic apartment, one of two units in a converted barn set behind the owner's house on an attractive piece of property on the South Shore. The real estate changed hands awhile ago and the barn was razed to make room for a sprawling new McMansion that is on the market today. Asking price: $1.4 million. As much as I liked the area, it wasn't the kind of place I'd describe as a million-dollar neighborhood. But of course, million-dollar neighborhoods began to appear everywhere in the last couple of years thanks to the kind of appreciation that comes with a red-hot property market. The high end of any real estate market thrives under several favorable conditions. One is mortgage rates, which have been cheap for a long time and hit their lowest levels on record last week. Another is market appreciation in less expensive real estate, which increases the buying power of people who want to trade up. We've had that in spades. The third condition is the most abstract, but perhaps the most important. It's confidence. A strong market for expensive houses feeds off a sense the economy is doing well and will stay that way. A bullish stock market is an important plus (the idea that people wary of plunging stock prices would look for greater safety in real estate doesn't work for long, cer tainly not on the expensive end of the market). Unfortunately, confidence is no longer a slam dunk. Meanwhile, evidence suggests supply is getting out of whack with demand for the most expensive houses. The MLS Property Information Systems Inc. database, which covers almost all of Massachusetts, recently showed 960 offerings listed for over a million dollars among a total of 16,700 single-family houses on the market. In Newton, there were 73 single-family or condominium listings over a million dollars, compared with 44 a year earlier. Similar listings in Brookline had climbed from 22 to 64 over a year. The numbers were up from 16 to 33 in Lexington and from 33 to 40 in Weston. Downtown Boston offered 73 listings over a million dollars, compared with 21 a year earlier. Like politics, all real estate is local and more information blurs the picture a bit. In such towns as Lexington and Newton, the amount of time the average million-dollar home was on the market had climbed with the growing inventory. But other communities, such as Brookline and Weston, saw the average ''days on market'' figure decline. There were 52 houses for sale in the upscale suburb of Dover last week, including 32 at prices over $1 million. That's a lot of expensive houses, especially as a percentage of the town's total inventory of real estate for sale. But Maryann Clancy of Coldwell Banker Hunneman points out the same town had 14 other million-plus houses under agreement with sales pending the same day. The bigger picture, however, suggests the spread between offers and asking prices is widening and few people want to budge. Chip Case, a real estate economist at Wellesley College, routinely makes presentations to small groups of brokers from different areas. He said their comments make it clear the ritzy real estate market is beginning to fizzle out, but slowly and one town at a time. The million-dollar house market looks like a real estate bull that's running out of steam, not falling on its face. Hopefully, that's what we will say about the entire housing market after the current cycle of powerful property appreciation is history