A recent front page article in the Wall Street Journal provides and astounding portrait of the growing divide between the mass housing market (under $300,000) and the high end market—generally defined as homes that cost above $750,000. Partly due to the housing rescue plan which is stirring first time home buyers to get out in droves and continued low mortgage and down payment rates, the divide is also being caused as the affluent take to saving cash, following large economic losses. Additionally, the article notes that inventory of high end homes is on the rise, as are defaults and deficiencies of prime jumbo mortgages, leading analysts to predict overall price declines of 60% –way above the 40% of the rest of the market.
Amazingly, comparative MLS data from last year to this year mirrors the Journal’s findings. Manatee County has more than three times as many high end market homes listed this year than last. While that amounts to 550 homes currently for sale (as opposed to 178 last year), there are 22 percent more short sales available and four times as many bank owned properties in this category now than then. Unfortunately, last year sales were much stronger, with 133 homes sold in that period, while only 42 have sold so far this year.
But don’t despair! Information is always power. If you are looking to sell your high end home, make sure to adjust your expectations to market conditions. Conversely, if you are thinking of buying in this segment, you are aptly positioned. High end market sellers can be expected to adjust themselves similarly to the mass housing market. Patience in this case should yield a valuable payoff.