Monday, August 03, 2009

Housing: Slow sales at the High End

by Calculated Risk on 8/03/2009 12:32:00 AM

From Nick Timiraos and James Hagerty at the WSJ: High-End Homes Frozen Out of Budding Housing Rebound

Housing is fast dividing into two markets: Sales of low- and moderately priced homes are picking up and values have stopped falling in some parts of the nation. But on the upper end, sales remain mired in a deep slump and price declines are expected to accelerate.
The divide between the mass market and the high-end -- generally defined as homes that cost above $750,000 -- partly reflects the effects of Washington's housing-rescue plan, which is producing winners and losers.
To be sure, the affluent housing market is substantially smaller than the mass market. Sales of existing homes priced over $750,000 accounted for 2.3% of all sales in the first quarter of this year, compared to 4.4% of the housing market in 2007, according to the National Association of Realtors.
But what percentage of the market in 2005?

The low end is doing well because of first time buyers and investor groups buying properties (see previous post). Prices in the mid-to-high end are stickier and will probably decline for some time.