Tuesday, June 10, 2008
Housing crisis hits the high end
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.
The photo is of a McMansion in Beijing China. This is going to be one interesting global recession.