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What's Going on with the Massachusetts High End Real Estate Market?

By Eleanor Boschert

Got a few million to spare on a new home? With all the real estate activity in Boston and Massachusetts, the high-end market is flourishing. So, if you've got an eye towards investing in a luxury property, consider the market and what drives it.

According to the Boston Business Journal the $1M plus residential properties market experienced a 19.4 % year-over-year leap in sales volume for single-family homes and a 16.4 % increase for condos in 2012. They report that 23 of the 25 most expensive condos sold were in the Back Bay and three of the 25 largest single-family sales were in Boston proper. From there, suburban enclaves such as Chestnut Hill and Brookline claimed four of the top single-family sales. Weston, Concord, and Wellesley hosted nine of the highest residential home sales.

For 2013, the luxury numbers continue to soar. The Ames-Webster Mansion at 36 Dartmouth Street sold to a Saudi businessman for $14.5M. Curbed Boston reports that the Mandarin Oriental in Boston has bolstered its healthy track record of high-end sales with a recent $7M addition. And, with only four months into the year, 3 Commonwealth Ave. has gone above for $7M and a corner high rise condo at 4-6 Newbury St. also went for over $7M.

So, what are the factors that drive the big numbers?

Just like all real estate transactions, there is no exact science to pricing and selling. Market trends, economic and job growth, consumer confidence, combined with the uber wealthy's desire for pricey and unique luxury items such as real estate figure in the mix. Other contributing factors include the location, premium amenities, quality of the finishes, rarity of the property, celebrity owners, and architectural or historical significance. It's a small market, accessible by only an elite group, so each listing must be tailored and individualized. Gathering comparable market data can be a challenge at the high end, as each property is a listing unto itself, so the expertise and savvy of a real estate agent highly experienced in the rarified niches of luxury sales can significantly drive the pricing and transaction details.

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