More Expensive Home Prices Under Pressure
Business Week reported that high-end home prices are falling. "Luxury housing became significantly more affordable in Boston and Chicago, where prices fell a little over 10%; in Miami, down 6%; and Washington, D.C., down about 7%."
In light of the Georgia banking situation posted yesterday, the news that increases still abound in some areas may not be comforting. "Luxury home prices in Atlanta spiked, rising 14%, while in New York City, they rose 8%."
5 Comments:
This is usually the sign of a slowing market.
Also with 1st time homeowners being priced out of the market
there will be less people to buy.
CNBC seems to be cheerleading the
housing market just like they did
with the nasdaq.It makes me sick....
This has been true for a while, at least in my area. I live in marin county (just north of SF). I was looking at homes to buy back in 2001. Most of the ones I was looking at were in the 1.2-1.5M range---too expensive for me. The ones below $1M weren't very nice---either tracty-style homes or fixer-uppers (this is an expensive area.)
Since I wanted to keep my monthly costs under $5,000, I decided to rent instead. I found a beautiful home that had been on the market for $2M but was withdrawn due to the uncertainty over 9/11. The rent was $4,200. If I had purchased it, my monthly net costs would have been nearly $11,000.
Four-and-a-half years later, I'm still renting it for $4,200. Funny thing is, most of the dumpy homes that were going for $600K-$800K back in 2001 have all jumped 30-50% in value. But the home I live in would still sell for around $2M-$2.1M. So no gain at all.
If I had bought, I would've gained nothing in equity. And I would be out $367,000 in excess monthly costs (own vs. rent).
Guess there's an upper limit beyond which people won't pay. Most of the action has been in the "affordable" low-end and mid-range sectors.
By the way, housing is still selling briskly here and rentals (even well-priced beautiful homes with gardens, mountain and bay views) are sitting on the market for months.
stillrenting,
Please keep us updated about Marin. We need your input. Thanks
"CNBC seems to be cheerleading the
housing market just like they did
with the nasdaq.It makes me sick...."
Agreed. Did we expect anything less ? At least with the stocks people debated things and openly spoke of P/Es. When was the last time the media actually rationally reported on the housing situation ? I guess we've seen a few decent articles this week. The end must be near !
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