Worth: So, how’s business?

Developer: Great! We sold all the properties in our first development. A few of those buyers have already bought lots in the second, which we’ll develop later this year.

W: They want to own two properties?

D: No, no. No, they’re investing. They’ll build on them, then sell them for a big profit.

W: Doesn’t that eat into your own profits?

D: We don’t mind–it gives us the capital to develop more of our properties, and it gives them the opportunity to double or triple their money.

W: Aren’t they worried about the market?

D: Our part of the market is pretty well insulated. The type of people who buy our properties are buying them because they really fall in love with them. They aren’t too concerned with fluctuations in the real estate market.

W: The type of people who want to double or triple their money sound like the type who would worry about fluctuations.

D: Well, we do have some who like to speculate, just for the charge they get out of it, really. But most of our buyers don’t really focus on them as investments.

W: Are you concerned about the growing inventories of high-end properties?

D: No, again, we’re insulated from that because our clientele are looking for really unusual, exceptional properties.

W: A number of exceptional townhouses in New York have recently seen their asking prices slashed by millions of dollars.

D: Yes, some things in some markets may be too aggressive. But even so, our clients don’t worry much about losses of that magnitude.

W: The same people who are begging to be admitted to any hedge fund that promises a middling single-digit annual return are not too worried about a loss of several million dollars?

D: Well, they look at their investments and their home-buying very differently. They fall in love with these homes.

W: I thought they were speculating.

D: No, only a few of them are. And they look at it really like more of a game. They are risk takers. They enjoy it.

W: What do you think about the rapid growth of the jumbo mortgage market? Does it worry you that high-end real estate is being financed with a growing proportion of debt?

D: No, not really. Most of our buyers can just write a check for these properties. If they borrow to buy them, it’s just for the sake of convenience.

W: I can’t imagine they would tie up that much cash, unless they were worried the property would not appreciate enough to offset the cost of the mortgage.

D: Well, again, it’s just a matter of what is convenient. And I’m sure they will appreciate. Real estate has outperformed for decades.

W: Well, at least since 1993 or so. But to get back to the broader real estate market–its health depends on the health of the economy and the markets. If your buyers take a hit in their portfolios and businesses, and see real estate values stagnate, all at the same time, wouldn’t it affect your part of the property market?

D: Well, OK, it might, a little. But it would be just a short-term blip.