As I mentioned in my last post there are a lot of new development condos on the market right now and some developers are getting desperate. The people behind the development at 100 Beacon, are now offering a free mini cooper with with every unit. The cheapest unit in this building has an asking price of a cool $2.1 million. I might be underestimating how the economy is going, but if you can spend $2.1 is a Mini Cooper really going to make a difference?
This is not the first time this has been tried in Boston. In 2007 the Macallen tried this same tactic, they gave away a Toyota Camry Hybrid with each condo sold. (They went with a hybrid car because it’s a green building.) I’m sure this won’t be the last attempt by a developer to do this, but let me give some advice to those who are thinking about it. Pair the car and the building! The hybrid car with the green building makes sense, a Mini Cooper says your striving to be cool with a car that’s lost some of that cachet. If I were trying to be cool I’d toss in a smart car, it’s cheaper, more rare and will turn a lot more heads especially when you park it sideways.
Scarcity! That’s the buzzword luxury retailers across the country are trying to teach to consumers this year. Last year was a very different story, retailers had more merchandise than they knew what do with. This year that certainly won’t be the case. Retailers are learning that if you simply don’t offer more, customers are will to pay full price to get what’s out there. The New York Times even did a whole article on this idea.
Luxury retailers weren’t the only ones who forgot scarcity, luxury condo developers got stuck on this same train of thought. They forgot that part of what makes a luxury condo so expensive and attractive is the scarcity of them. They decided instead, to follow the philosophy of selling luxury to the masses. The only problem with this school of thought: a luxury good is no longer considered a luxury, when everyone can have one!
The condo market in downtown Boston is now flooded with “luxury” condos: 45 Province, W Residences, The Clarendon and the Bryant Back Bay just to name a few. As a result it’s looking more and more like, “The luxury condo has become the sad knockoff Chanel purse peddled along Canal Street.” *
To continue our fashion metaphor for a moment, this overstocking by developers means that just like the retailers, they too will be forced to have massive sales. Think of the recent auctions as the Black Friday Sales. (People know ahead of time that they are coming and they set the price for the remainder of the season.) The main difference between Black Friday Sales and recent auctions, this year the retailers aren’t restocking. The condo developers aren’t as lucky. Even if they sell half the units to get sales moving, they still have hundreds of condos left to sell.
So my take on all this, it’s going to be a long time before we sell out all these luxury buildings and this year it’s best to go shopping on Black Friday!
*Before I get all sorts of angry emails, I agree that some of the units in these buildings are truly stunning and incredible places. However, one must admit not all are on the same level. A condo with a stunning view of the brick wall less than 30 ft away should not be labeled a “luxury condo” just because it’s in the same building as the incredible penthouse.
That’s the question this article from the New York times asked over the weekend. In New York the Bachelor Pad maybe dead but in Boston I’d say it’s just down with the flu. (Not everyone everyone has it, but some people do and it’s not that bad.) I certainly have quite a few clients who updated their bachelor pads this year and some that just stayed put. A couple quit the lifestyle and moved in with their girlfriend, but even then they didn’t sacrifice like those in New York. The Clarendon, one of the most expensive rental buildings in Back Bay is currently out of 1 bed units and my guess is quite a few of those have been rented by single men. Still, I’ll put question out there, Bachelors of Boston are you downsizing this year?
The First Time Home Buyer Tax Credit was officially extended today. President Obama signed the bill into law, creating an extension and expansion of the credit for new home owners. The extension covers first time buyers who purchase by April 30th 2010 and must close by June. This gives those of who you have been sitting on the sidelines for the past few weeks plenty of reason to get back into the game again. You will still get the same $8,000 that you would have if you had bought earlier.
As for the expansion part, the credit is now being expanded to anyone who has owned their own home for the past 5 years and wants to buy something new. For these people the credit will only go up to $6500 but it’s still a great incentive. There are of course income limitations with both of these credits but they have been raised above what they previously were at. For more information on the tax credit or if you’re interested in purchasing a new home, please don’t hesitate to call us at 617-449-3642 or search our website.
Luxury Buildings | chris | 
November 30, 2009 11:20 am | 
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