So a reader asks about high end houses holding their value

I'd think her own agent could tell her that, but perhaps that agent wants to sell her one, and is reticent. In any event, here are the three specific homes asked about - the history of each should answer her question:

 8 Dairy Road

8 Dairy Road

8 Dairy Road, currently asking $7.295 million. Its builder asked $10.750 for it in 2007, admittedly on the crest of the bubble, and finally sold for $8.2 in 2010. Put this in the loser column.

 615 Lake Avenue

615 Lake Avenue

615 Lake Avenue, asking $10.9 in 2016, it's dropped to $8.950 today, and remains unsold. Price history unavailable, but I'm confident it hasn't held its value: Especially at this level, 17-year-old buildings don't.

 47 Alpine Road

47 Alpine Road

47 Alpine Road, asking $7.499 today, after starting off in February, 2016 at $8.995. Owners paid $7.2 million for it in 2005: Another loser, twice over: the 2005 sellers paid close to $11 million for it the year before. 

At the lower, more modest price levels, there's still a demand for houses qua houses, and in combination with soaring land values, prices have held their value in the more desirable neighborhoods. Land values in other areas have dropped or, at best, remained stagnant, so the depreciating assets perched atop that land have followed it down.

The market for used houses in nosebleed territory has weakened considerably over the past decade, primarily, I'd guess, because buyers who can afford such expenses want new construction: almost all of my own own, young clients who work with me in the $5+ million category insist on limiting their search to homes "no older than 10 years", and I'm sure my experience is not unique.

So, do expensive homes hold their value? Not so I've noticed. Land can increase in value, but physical structures do not: that's why accountants and the IRS recognize commercial buildings as depreciable assets. Common sense tells us, or me, anyway, that residences are no different.