Prices down, foreclosures up
In Palm Beach, Fla. (zip code 33480), median home prices fell 38% during that period, according to the real estate Web site Trulia. Prices in Greenwich, Conn. (06831), dropped 15%, while homes in Wayzata, Minn. (55391), are selling for 28% less.
Prices in other wealthy towns also declined: Gladwyne, Penn. (19035), was down 6%, and Beverly Hills (90210), Lincoln, Mass. (01773), and Ladue, Mo. (63124), each slid 2%.
"What I'm finding is that million dollar plus homes declined 4% or so [over the past 12 months]," said Don Kelly, a spokesman for Zaio, which is building a national data base of home value appraisals.
From this CNN article
Yea... the median is down a little. But we all know every buyer is getting the best home for the money. So its the similar home with the better view or finer fittings that is selling. The undiscounted albatross is sitting. One can now find homes that have been on the market two years in most high end neighborhoods.
As to people being able to wait out this slump... never before has the "upper middle class" put so much of their wealth into real estate. Never before are they so far in debt. Look at the blue book values on used cars. Down a bit eh? In particular SUV's and large BMW's or Mercedes. Oh yea, these immune neighborhoods have tons of occupants piling on the credit card debt. When that means of maintaining lifestyle goes away, so will the home prices.
Nothing will happen quick. But anyone who buys in the next 24 months is being stupid. There is no bottom within that time frame. Where I want to buy will probably bottom in 2011 or 2012. Some areas might bottom earlier, but none will before 2010. Why? Debt, incomes, gasoline, and credit. Its called a deep recession folks. All the small business owners seem to get it right now. Soon it will be the whole population.
Got Popcorn?
Neil
ps
The photo is of a McMansion in Beijing China. This is going to be one interesting global recession.
4 comments:
Neil - the a few of the blurbs from that article killed me re: buying in close in Arlington.
"There are motivated sellers, and opportunities for buyers to capitalize on sellers downsizing," he said. Some of the owners of large estates are moving out and resettling in Greenwich's more urban downtown area.
Getson is seeing a downsizing phenomenon similar to Greenwich in the Philadelphia area, although not in Gladwyne proper. "A lot of people are moving from mansions and buying condos in the city," she said.
Jesus - I cant catch a break!
Also, with regard to your comments:
"never before has the 'upper middle class' put so much of their wealth into real estate. Never before are they so far in debt...Oh yea, these immune neighborhoods have tons of occupants piling on the credit card debt."
Have you ever wondered if there are geographic differences between where the faux wealthy and the truly wealthy live.
Case in point, Loudon Co, 25 miles out is far wealthier (on average) than Arlington. The whole place is filled with huge McMansions - houses that make the statement look at me!!! Im important dammit!!! Same thing with the cars - BMW, Lexus etc. are par for the course out there. Homeowners there dont mind driving 3 hours per day to work, as long as they have the big castle to come home to at night - its all about keeping up with the Jonses ya know.
This isnt true in Arlington. The houses are pretty small & unpretentious - often early 1900-1940s housing. These houses are usually not impressive. In places like Peoria IL, they woudl be deemed average. Further, if these houses were in Loudon they would be deemed "inferior" by the nouveau riche. Same thing with the cars. The lack of parking (other than street parking) means cars are smaller, and more likely to get scratched up. Thus, the Hummers (too big) and BMWs (too nice for the street) arent seen much. The area is mostly filled with Camrys, Mini Cooper's etc.
The only thing these Arlington houses have going for them is location - 10 minutes to work, 10 minutes home. For these homeowners - its not about keeping up with the Jonses - its all about quality of life...Park the car on the weekends, walk to all the shops & restaurants, etc. For them the idea of being in the car is torture.
Accordingly, it seems that the look at me nouveau riche are struggling more than those who dont care about such things. Thus, the inner areas are doing far better than their (just as wealthy) exurban counterparts.
Thoughts???
Incidentally - sorry for the triple post but here is some interesting evidence that would support what I am saying. The following are sales records for April for houses selling for 1 million to 2.5 million dollars (i.e. the everyday rich):
Close in
Arlington:
Listings - 127
Sales - 19
Absorbtion Rate - 6.68 months.
Far away, look at me
Loudon:
Listings - 208
Sales - 2
Absorbtion Rate - 104 MONTHS!!!!!
hi,
the articale written on housing crisis hits the high end is very truly.Its sure that the new home byers can purchase a beautiful home for the money.
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meshil
Dual Diagnosis
Dual Diagnosis
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