Questioning Boston Luxury Real Estate Pricing?May 9, 2015
A week does not go by without a Boston luxury home buyer questioning the pricing of a property. Obviously in a high demand and limited inventory market, buyers are not totally comfortable with paying such high prices. Both sales and asking prices are setting records that consumers are not used to. And they frequently ask for the data to back it up.
There may be a few sales here and there to substantiate the high prices, but for the most part, it is what it is IF you want a Boston luxury home badly enough. This is certainly the case for brand new Boston luxury real estate constructions and complete renovations. The acquisition and construction costs are higher now regardless of where you do construction . Therefore any new unit in a new construction project will be obviously asking a higher price per sq’.
In addition, each developer or seller will most likely add new finishes and extra bells and whistles to their Boston luxury real estate property. That too, will add to the asking price. So the common question of “what are comps” is becoming more and more difficult to support. It essentially boils down to how much a buyer likes and/or needs a property and how much they’re willing to pay for it. Offer price doesn’t necessarily reflect market data.
Now more than ever it’s important to be market savvy and well educated before you jump in and tie up a property. Yes, the market is high, but looking at the same property in a few years time, you will be paying more.