Until recently, the luxury real estate market remained buoyant as the rest of the U.S. housing market crumbled. Now the stock market has crashed, hundreds of thousands of financial jobs are disappearing and Wall St. bonuses are expected to fall by 50%. Barron's predicts the fallout on luxury housing markets like Manhattan and its tony suburbs will cause price declines of 20%-25% over the next five quarters.
Transactions in the $5 million-plus market are generally in cash, and so are unaffected by tighter mortgage standards. Foreclosures, too, are rare. But move-up sellers can’t sell their luxe digs and buyers are waiting for prices to fall further. Foreign buyers who were propping up markets like Manhattan and Florida are now retreating as their own fortunes wane.
Bel Air, Calif., Las Vegas and New York's Westchester County have seen price cuts on 45%, 29% and 28% of all luxury listings, respectively. Inventory and time on the market is skyrocketing while incentives abound. In some markets, luxury homebuilders have noted a 50%+ decline in demand.
Traditionally rich enclaves like Beverly Hills and Greenwich, Conn. have seen less price cuts than in places that were just bid up during the housing boom. But that doesn't leave them immune. Barron's warns New York: "Look out below!"
1 comment:
Like everything else in a macro effect, our immediate area will begin to feel some of this effect - on a trickle basis, then snowball with the impact of infrastructure costs in Hoboken (yet unbudgeted for despite property tax hikes). Investment bankers are beginning to sell their PRIMARY residence in areas not far from here.
A survey showed that one in 10 American households with mortgages is overdue on payments or in foreclosure, adding pressure on Washington to provide more relief to distressed borrowers.
The Mortgage Bankers Association said its latest survey, released Friday, showed that 10% of mortgages on one- to four-family homes were at least a month overdue or in the foreclosure process in the third quarter. That is up from 9.2% three months earlier and 7.3% a year ago. The current level is the highest since the trade group began such surveys.
Post a Comment