Skip to comments.In Boston, Nearly 1 in 20 Households are Millionaires
Posted on 01/01/2006 4:29:56 PM PST by HostileTerritory
The number of millionaires living in the Boston area, already one of the wealthiest regions in the United States, will surge 50 percent over the next five years, according to data from two wealth management companies that have studied the issue.
For a city that as recently as 30 years ago struggled with a decaying urban core, the expected influx is one more sign of its dramatic turnaround. By 2009, the number of millionaire households in the region is expected to increase to 88,000, up from 58,000 in 2004.
The projected growth rate parallels the national average. But because Boston starts out with a higher percentage of millionaires in its population -- nearly one in 20 households, more than New York, Chicago, and Los Angeles -- and because the overall population is barely growing, demographic specialists expect more impact here.
The wealth surge will shape the future of the region and the quality of life in Boston, both for future millionaires and those who are nowhere close. Already, businesses catering to the wealthy are flocking to the city: Steakhouse Smith & Wollensky, where the average evening diner spends $72, opened in the Back Bay in 2004. Financial services companies Northern Trust and Bank of New York recently set up new offices here to serve the wealthy, while Bank of America Corp. moved its global wealth and investment management division to Boston.
(Excerpt) Read more at boston.com ...
How do they hide it?
That explains a lot...the white liberal guilt must be off the charts in Boston...
Indeed it is. Some of the zip codes mentioned in this article have very high Democrat voting tendencies, particularly for federal office... although it should be said that a few other well-off suburbs are about the only part of the state that vote regularly Republican, along with Springfield's suburbs and a few towns in the middle of the state.
When the average house costs $500,000, you will get a large portion of that million just by hanging on to your house and riding the equity wave.
My thought exactly. These are "net worth" millionaire households, right? So that means that the FMV of your residence is counted--a value that is theoretical. IF there is a residential RE bubble, and IF it bursts, I suspect the number of "millionaires" will drop precipitously.
They bought Bank Boston or whatever BayBank turned into. They are definitely catering to the old wealthy geezers in the suburbs. You know, the people who whine about spending $20 a presription but have $500k in savings and owe nothing on their million dollar house. Like to have their egos stroked so BoA has greeters trained to remember names.
Another thing that happens is that house you bought a few years ago for $150,000 on Boston's south shore will now sell for $300,000 plus.
Retired people will sell, pay off the small mortgage(if they even have one) and head south or west with a bundle of cash to the warmer weather and much cheaper housing. And have plenty of money left over to put in the bank or other use.
You don't gain anything by selling and then buying locally since you will pay through the nose for another house in the same town. - Tom
Yes, I'm lucky I bought before the boom began but I'm also paralyzed because trading up means a much bigger mortgage.
First of all,the assumption that the typical house in the areas mentioned is $500K is incorrect.Anything bigger than a gargle in any of these towns will go for a million or more.
As for the real estate bubble,Boston is seen as one of the most overheated,overvalued markets in the country.Add to that the fact that Greater Boston represents at least 66% of the states population and that Massachusetts is one of three states that is *losing* population and I think it's safe to say that in a few years there'll be far fewer millionaires in the Boston area.
Whew, Kerry just made it in considering he's part of a millionaire's household.
If one figures housing equity as part of a retirement plan, make sure it's the housing portion of the retirement plan so that as the market rises or falls your investment and future purchase plan will rise or fall together.
Where are you located if I may ask? In the towns/areas specifically mentioned on the map that goes with this piece, colonials start at a million.For example,the house in which I grew up (in Waban) is now assessed by the City of Newton for 1.1 million,which means that it could sell for at least 1.3 This house,while nice and located in a very nice neighborhood,is anything but luxurious!
My Dad paid $34K for that house in the late 50's.
One in twenty in Boston are millionaires...and 19 out of those twenty are democrats.
The valuation is supposed to approximate market value, and with the hot RE market of the last few years, the tax man has done exactly that. The other way, practiced in a number of the well-off suburbs, is to pass over-rides for the "emergency" budget items that seem to crop up more often than not. They usually pass: "Its for the schools -- its for the children and it keeps our property values up." Maybe so, but more efficient use of funds doesn't seem to ever be the preferred solution.
With the state's population on the decline, there are less people to pay taxes. The natural trend will be for taxes to continue to escalate, compounding and increasing the exodus.
This makes me feel so much better that I contributed my part of the 14 Billion for the Big Dig so these poor people can make their way around town.
Wow! If I move to Boston I will have a 1 in 20 chance in being a millionaire. I like those odds. Boston here I come.
I live in Somerville, but I wasn't referring to my town, I was thinking of some of the older suburbs like Burlington and Sharon and Norwell. My numbers may well be off, because I'm not in the suburban market, but wouldn't you agree that Newton tends to the other extreme because it's so close to the city, is on the T, and has so many neighborhoods of unique houses?
You know, I don't think the state's adult population is on the decline--but I can easily believe the population of young people is. We all pay lower taxes here because we have fewer children to educate. College kids, 20 somethings, and DINKs are a net plus for the government even if you can't build a society out of them.
Schools are one thing (although reduced class sizes may not mean less schools, teachers, principals etc), but the cost of police departments, fire departments, highways and other infrastructures are quazi-fixed costs where the less people contributing means the contribution is larger.
Someone suggested we redefine "millionaire" to mean someone who makes a million dollars a year, because with so many home equity millionaires around these days the term doesn't mean much. You can be one and still have trouble paying the property tax bills.
As of 20 years ago or so, Newton, Mass. had the 3rd highest per capita income in the USA! I wish I could back that up with a link, but it is just from memory that I know this.
That would be behind Beverly Hills, Ca. and Greenwhich, Ct. at the time. Things have changed for sure, but Newton is defintely high income, and is not part of the city of Boston.
Yes, but a town with 1000 adults and 300 children vs. one with 1000 adults and 1500 children will have the same number of taxpayers. Fewer parents with children, replaced by people without kids, means that our tax base is sound.
Bank of America was forced to move its wealth management group to Boston. BoA made some promises to the governor of MA. They didn't follow through. The governor got upset and put the squeeze on the bank. Reluctantly the bank move wealth management to Boston. How long it stays there...who knows?
New meaning to limosine liberal. No wonder the keep voting in fats and the liar. They are one of them.
<< How do they hide it? >>
In its source.
The big dig.
They hide it there.
[And in the scores of lesser such feral-gummint rob-Westerners-to enrichen East-Coast-establishment-liberals scams]
<< Yes, I'm lucky I bought before the boom began but I'm also paralyzed because trading up means a much bigger mortgage. >>
Moving up means moving to New Mexico, Colorado, Wyoming or Montana.
Yes,the towns/areas that were specifically highlighted on the map that accompanied this piece (Waban,Chestnut Hill, Dover,Carlisle,Weston,etc) are unlike any other parts of the state,with the possible exception of Martha's Vineyard, in regards to real estate prices/values.
On the other hand,the figurers you've quoted are probably pretty (if not very) accurate when applied to the towns that you've mentioned.
Per usual the Boston Globe reporters are misinterpreting the data. They interchange the terms numbers with rates.
You can have the percentage of millionaires go up while the actual number of millionaires goes down or stays the same.
Example: Twenty percent of the population are millionaires. The poor people leave the state because they can no longer afford to live there. The percentage of millionaires goes up even though there is no increase in the number of millionaires.
That is exactly what is happening in MA.
The population of Massachusetts is decreasing by a fraction of a percent a year. Until two years ago, it was growing at a fraction of a percent. Not only that, but the article says that the number of millionaires will increase by a large amount in absolute terms, not just a percentage.
Yes, I read the article. They interchange rates and numbers, then they base their projections on national averages.
As I said, you can still get a higher percentage of millionaires and have fewer of them.
That probably won't happen. People with money will be able to stay. People who lost their jobs in the tech crash, if they haven't already moved, they will probably have to.
Totally ignored in this article is the huge number of illegals who have moved to MA. They're the ones who are mowing the lawns in Weston and doing the dishes at Mistral.