Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
Economy
Related: About this forumWealth Effect’ Kicks in: Luxury Homes Are Hot, Rest of Housing Market Gets Hosed
Wealth Effect Kicks in: Luxury Homes Are Hot, Rest of Housing Market Gets Hosedby Wolf Richter September 11, 2014
Home sales have been declining since last fall and in some cases steeply, with memories of bidding wars early last year triggering wistful sighs. The sales decline continued into the summer, and indications are that theyre dragging into September as well. But the median sale price continued to rise, if at a slower rate, and in many areas has moved out of reach for the median-income household.
Unsold inventories are rising. This has hit new homes the hardest. Otherwise exuberant homebuilders theyre licking their chops about the sky-high asking prices are complaining about foot traffic just as inventories have reached 6 months supply [Drowning in Unsold New Homes?].
Home sellers have gotten nervous, and 24% of them across the country lowered their listing prices in July to entice potential buyers to show up. And home flippers are finding their business model buy low and sell high under pressure [Home-Flipping Collapses in San Francisco, Losses Spread ].
But hey no worries at the upper end. In the luxury housing market, it has always been a long drawn-out process to sell a home. There arent that many people around with the means to buy these properties, and sellers usually arent that desperate and dont have to sell and thus can hang on to their homes for years. In that rarefied air, the housing market is booming, and the time it takes for a luxury home to sell is dropping.
http://wolfstreet.com/2014/09/11/luxury-homes-goosed-by-stock-prices-rest-of-housing-market-teeters/
InfoView thread info, including edit history
TrashPut this thread in your Trash Can (My DU » Trash Can)
BookmarkAdd this thread to your Bookmarks (My DU » Bookmarks)
1 replies, 930 views
ShareGet links to this post and/or share on social media
AlertAlert this post for a rule violation
PowersThere are no powers you can use on this post
EditCannot edit other people's posts
ReplyReply to this post
EditCannot edit other people's posts
Rec (4)
ReplyReply to this post
1 replies
= new reply since forum marked as read
Highlight:
NoneDon't highlight anything
5 newestHighlight 5 most recent replies
Wealth Effect’ Kicks in: Luxury Homes Are Hot, Rest of Housing Market Gets Hosed (Original Post)
Crewleader
Sep 2014
OP
SheilaT
(23,156 posts)1. This is not terribly new.
In the past, during economic downturns, luxury items have tended to stay strong. Yachts. High end jewelry. Only rarely do high end homes come down in price.
During the Great Depression, mansions in Newport RI went for pennies on the dollar. Not that very many people had enough pennies to buy those homes. Right now it's big news that the Fisher home in Palmer Woods (a formerly very exclusive suburb of Detroit) sold for $1.6 million, by far the largest home price in Detroit in several years. It's a place that will easily be worth several multiples of that price in a few years as Detroit recovers from its economic downturn.