<p><a href=”http://vimeo.com/106889272″>Plain Road</a> from <a href=”http://vimeo.com/user24367702″>Michael Breer</a> on <a href=”https://vimeo.com”>Vimeo</a&gt;.</p>

The Draper House is for sale.  Not to be confused with the Don Draper house.  For those unfamiliar with the Draper surname, the Draper’s were instrumental in the proliferation and technological advancement of textile mills throughout the Commonwealth of Massachusetts in the early 19th century.  Among such technological advancements, the flyshuttle hand loom doubled the efficiency of the conventional loom by allowing one weaver to run two looms simultaneously.   The company, along with the intellectual property, was sold by the patriarch Ira Draper to his eldest son, James.  James built this idyllic Wayland estate (the one in the video) to have sufficient room for family, while also being in close proximity to Boston proper.  This 6350 square foot home boasts six bedrooms, was renovated in 2005, and is surrounded by a lovely garden and gargantuan back yard.  Let me know if you’re interested in taking a look!

This PH was recently reduced to $2.495 million.  At $781 per square foot it is an extraordinary offering.  Also, if you are an international type, you’ll have close access to Logan International Airport.  See the Seaport’s finest while it’s still available.  Oh, the roof is retractable.  If you have any questions, don’t hesitate to email me at michael.breer@gibsonsir.com.

Check out this HD drive-through of Marlborough Street in Boston, MA. Marlborough Street is one of the most desirable streets in the most desirable locale in Boston: Back Bay. Below you will find statistics for listed properties as well as those that sold in the last 6 months. The video will take you from the corner of Massachusetts Avenue and Marlborough to the corner of Marlborough and Berkeley. All things being equal, the price per square foot will typically be greater as you get closer to Berkeley. If you have any questions, don’t hesitate to email me at michael.breer@gibsonsir.com.

Listed:

Condominium Listings: 10
Avg. Liv.Area SqFt: 1,549.20
Avg. List$: $1,868,890
Avg. List$/SqFt: $1,071
Avg. DOM: 81.60

Sold:

Condominium Listings: 59
Avg. Liv.Area SqFt: 1,154.46
Avg. Sale$: $1,100,471
Avg. Sale$/SqFt: $905
Avg. DOM: 37.27

Though the Macallen PHB has been “on the market”, it has recently been reborn.  This new construction was just recently finished and does not resemble the down to studs former self.  It is modernity, style, and functionality all rolled into one.  It also features one of the coolest features that I’ve seen in Boston’s high end luxury condo market:  a gargantuan retractable skylight.  The roof top deck ain’t too shabby either (see the video, and excuse the elevator music).  Come one, come all!  If you have any questions about his property, or any other property for that matter, do not hesitate to email me at michael.breer@gibsonsir.com.

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A friend of mine, by the name of Dominique Benz, was recently featured in the NY Times real estate section for a surge in Manhatten home-buying among Brazilian couples. Though I wasn’t alerted to this until last Tuesday, it seemed interesting in light of the nationwide street demonstrations precipitated by a nine-cent bus fare increase. That’s right, a nine-cent increase. Though this may in isolation seem trivial, it is part of growing discontent surrounding services provided by the public sector to a growing, but still beleaguered middle class. The fair increase, coupled with an inflationary environment means that many in the middle class have even less discretionary income than a year ago. The “Salad” revolution, occurred in an environment of rising middle class incomes, but also widespread corruption, ostensible income inequality, and public sector largesse for the impending World Cup in 2014. For a more in depth analysis of the “revolution”, check out this article: http://www.economist.com/news/americas/21579857-bubbling-anger-about-high-prices-corruption-and-poor-public-services-boils-over.

So why does this phenomenon concern me whatsoever, and why did I even drop the name of my well-heeled friend? Well, for one thing, instability (resulting from income inequality, inflation, inadequate public sector services, etc.) in developing countries \influence markets in desirable urban areas in the United States, which includes Boston and Cambridge. Within a context of widespread middle class ferment; from China, to Turkey, to Brazil, the well-to-do are seeking asset protection in the form of high-end real estate purchases. In the case of my family friend , “8 of the 181 condo units in their building have been bought by fellow countrymen”, according to the NY Times. The other question that stems from these asset purchases, especially considering the timing is, do foreign home purchases (especially in high-end markets) presage political upheaval? Though I don’t have the raw data in hand, or the time (I’ll leave that to the social scientists), there is anecdotal evidence to suggest that this is the case. The story I referred to earlier was printed on February 16, 2012; that is, long before the “Salad” revolution. If you examine foreign real estate purchases, it is clear that many of the buyers are beneficiaries of economic liberalization and globalization; however, many of these countries are lacking in the area of rule of law, political participation, access to basic services among the citizenry, etc. In an article published in June of this year Jorge Uribe, Senior Vice President of One Sotheby’s International in Miami spoke about the slight decline in the high-end market in Miami, but added, “We may see an upside in the ultra-luxury market. Whenever you have political turmoil in Columbia or Nicaragua or Latin America, you see an uptick in people buying assets here.”

Many of the newer luxury building throughout the country have sought to target exactly such a demographic. In New York, wealthy Chinese buyers have flocked to One57 and 56 Leonard St., both luxury towers offering concierge and doorman services that appeal to the international set. The Observer reported that, “In a nod to Asian buyers, the building put many of its most luxurious full-floor apartments on the 80th through 88th floors—a clever way to appeal to the Chinese belief that eight is the luckiest number. Apartment 88 is under contract to a Chinese buyer for around $50 million.”

Interestingly, according to National Association of Realtors, 62% of the foreign home buyers in the US payed cash in 2012, that’s up from 28% in 2007. On the surface, this seems counterintuitive: why would foreign buyers be paying in cash when interest rates are considerably lower than they were in 2007? In part, it may be the result of the type of foreign home buyer; i.e., foreign home buyers that are flush with cash. Also, sellers of high-end properties find cash deals more persuasive, not because they doubt the prospective buyers ability to pay, but rather, because cash deals are not subject to the property appraising at or above the offer price. This is a situation I encountered recently on a sale on Beacon Street in Boston. The buyer wanted to move aggressively. The seller requested that he pay cash and drop the mortgage contingency in exchange for concessions. The question that follows: do these purchases affect prices across the board? Again, such answers require thorough research, but it does seem as though such a conclusion would follow. When determining an offer price, agents always look at the sale of comparable homes in the same locale.

For all you economists out there, I’d be curious to hear what your thoughts are on the aggregate impact of this phenomenon on popular urban markets. For the rest of you, be aware that competition for property in any posh urban environment is just as likely to come from China as it is to come from Charlestown.

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