Tuesday, December 29, 2015

From CNBC: "Luxury home prices finally getting too high?"

by Bill McBride on 12/29/2015 08:54:00 PM

Wednesday:
• At 10:00 AM ET, Pending Home Sales Index for November. The consensus is for a 0.5% increase in the index.

Note: Long time reader and mortgage broker "Soylent Green Is People" sent me a note yesterday: "the unthinkable is occurring: seems like Irvine home prices have hit an air pocket, falling in some cases."

Irvine is expensive, but not a "luxury home" market. But this has me thinking that we might be seeing a slowdown in prices increases (or flat prices) in some areas.

From Denise Garcia at CNBC: Luxury home prices finally getting too high?

The tables have turned in the real estate industry as luxury listing prices fell for the first time since 2012, according to a Redfin report. The brokerage firm suggests that the drop in prices stems from wealthy buyers and foreign investors refusing to buy at the top of the market.

Prices for luxury homes fell by 2.2 percent in the third quarter, compared to a year ago, according to the report.
These are listing prices, not sale prices - and it has seemed like many homes were listed at absurd asking prices. I doubt we will see a significant price decline in these areas, but prices might flatten out.