An authentic Hermes bag, a 10-karat diamond ring -- many luxury goods have become modern symbols of status and wealth. However, it is sometimes hard to determine whether their current market value is due to intrinsic worth or a manufactured perception of how scarce (hence valuable) these goods are. Diamonds were a rare find until the late 19th century when a veritable diamond trove was discovered in South Africa. The newfound mine had the potential to flood the market with inventory and dramatically decrease the value of the precious stone. To prevent too many diamonds from hitting the market, suppliers consolidated into De Beers and established tight control over the global diamond supply. To further drive up prices, De Beers began an aggressive marketing campaign to promote diamond engagement rings and deter the resale of diamonds -- the "Diamonds are forever" campaign. Increased demand, coupled with the De Beers-controlled limited release of inventory, made diamonds a status symbol and not just another readily available shiny stone. Hermès bags, another undeniable status symbol, also have tightly controlled supply chains coupled with aggressive marketing. A prominently advertised waitlist allows only a select few individuals (willing to lay down + $10,000) the privilege of ownership each year. Images of celebrities touting bags with the elusive Hermes logo fill Instagram and Facebook feeds adding to the brand’s aura. But does this truly make them more valuable? Would these bags, while undeniably well manufactured with the highest quality materials, be worth significantly less without the great barrier to ownership created by an intentionally limited supply? In real estate, it is also important to consider what we consider luxury items, and how we value them. I always advise buyers to look beyond shiny finishes and flashy details to the intrinsic qualities of a property – square footage, number and size of windows, age of building, exposures, views, ceiling heights, location. The New York market will always have the advantage of legitimate (rather than feigned) scarcity, particularly in prime locations, but it's important to remember walls can be painted and kitchens renovated, but square footage and views are forever.