Let me chime in as a voice of disagreement!

The city center condo market has already proven itself to be immune to the foreclosure problems that have been sweeping through the less desirable areas of our state. Not only have we not seen foreclosures, but price/sqft numbers for the Back Bay/South End/Beacon Hill markets have continued to blast further skyward!

We are in a happy Golden Triangle of immunity here. Our residents are the winners of society: doctors, lawyers, money managers. Last I checked, nobody was losing their jobs! Our economy here in downtown Boston is diverse and rich and every year there are more doctors, more lawyers, and more hedge fund managers clamoring for the precious few properties that come on the market.

I’d posit that even if developers were to add another ten thousand units to the city center market, we’d absorb it quickly, with ever escalating prices. Supply is constrained and demand is simply colossal and unquenchable.

Fact is, the young, the rich and the successful just want to live here. Demand for our neighborhoods is near-infinite. Demographic trends favor us: the large Wellesley manse is falling our of favor and the hip downtown condo is becoming the new measure of success. Urban means cool and cutting edge. Suburban means out of touch and high carbon footprint. None of *my* friends wants to be a Hummer-driving soccer mom in a carbon-belching evironment destroying McMansion.

Even the mortgage crisis affects us minimally, I can assure you many of my clients pay CASH for their properties.

In sum, if you’re expecting prices to decline here, you’re going to be sorely disappointed. We don’t *do* foreclosures in the Back Bay!

Sunshine & Lollipops, are you joking? I can’t quite tell. I mean, you could be. But it’s subtle. And if I think you might be serious then there are probably lots of other people who will take you seriously.

Every single statement you made is categorically false - this is why I think you might not be serious. The Back Bay ABSOLUTELY will decline.

The city center condo market has proven nothing - we are still early in the down-swing and the fact that the city center has not been greatly affected yet is no indicator of the future. California was unaffected in 2005 - how is that working out for them?

The very idea of a ‘Happy Golden Triangle of immunity’ is laughable. Hedge fund managers are the winners of society? Last I heard hedge funds ‘winners’ had over-invested in subprime mbs garbage and were going under in droves, including one of Harvard’s big endowment funds. Even doctors and lawyers will be effected as their rich clients cut back on the surgical enhancements and frivolous lawsuits and business slows down.

There are NOT more doctors, lawyers and hedge fund managers every year. Massachusetts and Boston in particular have a large net emigration (that is OUT of the area). This does not bode well for home sales or prices. Or are you suggesting we can all just doctor, lawyer and manage each others hedge funds?

Demand for back bay neighbourhoods is far from infinite. A rudimentary knowledge of economics and business would tell you this. Demand is constrained by price and incomes - even as prices fall, declines in incomes will cause further price declines. Many of your clients may pay cash but even in the back bay that is the exception rather than the rule. As less and less money is available for mortgages, the amount that buyers are able to spend declines and prices are further depressed.

You will soon learn that you absolutely *do* foreclosures in the back bay.

Well Phil, no sooner do you offer your spirited rejoinder than the Boston Globe publishes an article pretty much confirming all the points I’ve made!!

Check out this link: http://www.boston.com/business/articles/2008/08/08/boston_makes_way_for_its_biggest_mansion/

A Back Bay home worth $24,000,000 (Twenty Four Million Dollars)!! Now admittedly, this property is on the extreme high-end of the scale, but nonetheless, it certainly shows the where the trends are heading.

The wealthy are remaining wealthy. Their properties aren’t losing value. In this so-called recessionary economy, Boston’s city center market is spiraling ever higher in price. Notice how the fortunate couple are relinquishing their suburban Cambridge estate for a home in our beloved Back Bay? This is what I’m talking about. Who wants to live in the suburbs? Downtown is where it’s at.

And for every single lucky buyer that manages to join our exclusive club of downtown owners, I’d wager that there are at least 100,000 others right behind them, aching to get in as well. And with our Back Bay owner having created his palatial city estate by combining several condos together, supply is becoming even *more* constrained, driving values ever higher!

Our downtown real estate market is like a golden ratchet: every advancement we make builds a firm foundation on which further increases are built. You say there’s been a mortgage crisis? Well we’re almost at the 1 year anniversary of the so-called credit crunch and prices here in the Golden Triangle have gone UP, not down. You tell me what we should conclude. I’ve already made up my own mind: we’re immune.

I’ll go out even further on a limb here: I predict that *within our lifetimes*, the home described in that article will sell for $1,000,000,000 (One Billion Dollars). You think I’m crazy? That sounds outrageous? Well consider that not so very long ago, if you told someone walking down Commonwealth Avenue that one of those homes would sell for $24,000,000 they would have thought you were from outer space. But look what happened!!!

Facts are facts and they seem to agree with me.

And I’d like to offer my heartfelt, back-slappingly hearty congratulations to all involved in the Back Bay/South End/Beacon Hill real estate market! Agents, lucky buyers and sellers… may our great fortune continue forever!!

Sunshine & Lollipops, you crack me up. Yes, I think you might be ‘crazy’. That is what they call people who have strong beliefs and don’t bother to check the facts to find out if their beliefs are true or not.

Sales are way down, even in the back bay - why would that be if there is soooo much demand? Real estate markets are prone to regional variations in their reaction to national and global forces so it is expected that some areas will decline later than others.

So we’re 1 year into the credit crunch and prices have not appreciably declined in the back bay - does it look like that credit crisis is abating? No, for the past year sellers have been able to maintain the hope that intervention by the federal reserve or various levels of government would come to their rescue. Once we’ve gone a few months and everyone realizes that the low interest rates and housing bailouts have done nothing they will be forced to capitulate - that’s when prices will really start to come down.

Current sticky prices in the back bay only show how much more delusional back bay owners are than in other areas (as does your own commentary). Rest assured market forces will soon teach even the most unwilling students about the universality of economic principles.

I fear that your back bay agents, buyers and sellers will receive a great deal of luck - all of it bad.

Ahhh Phil, you see, the reason sales have declined in the city center market as a whole is simply that sellers, frightened by the overly dramatic news reports of a “credit crunch” and “real estate bubble burst” in the media, have chosen in many cases not to put their properties on the market. It’s certainly not for lack of desire and demand for their homes that sales numbers are down, let me vigorously assure you. We are supply, not demand, constrained here.

I beg sellers, please please please, more listings! I have a veritable army of buyers ready and waiting to pounce on any available property! Open houses on Sunday mornings are still mobbed with anxious, desperate buyers, hungrry for that prestigious Back Bay address they’ve craved for so very long.

Why do you think that even though there have been fewer sales, prices have flown ever further higher into orbit? There are just fewer sellers! And not just fewer sellers, there are even MORE buyers than ever!!

The weak dollar has caused our European friends to find that a chic downtown address to be incredibly cheap! My open houses are often attended by extremely fashionably dressed prospects speaking in the French. In several cases I’ve made sure to bring an interpreter with me. Representatives of Saudi oil barons often scoop up several properties at a time for the sons & daughters of their clients who are attending our local universities, and these people pay CASH.

Yes, the news here in the Golden Triangle is nothing but good. If we can get the hyperbolic media to tone down their hysterial bleatings about a so-called bad market, we might be able to convince sellers that, in the Back Bay/South End, at least, you can pretty much name your own price!

So cheers, and may the good times continue to roll!!

[...] question things have changed a bit in the past few months, but when I wrote in August that foreclosures in some of the city’s tonier neighborhoods could be right around the [...]