While upper priced properties have been lagging, I’m not sure if it will stay that way. The credit crunch has hit the jumbo loans more than the low end loans. Consequently the number of sales in the high end seems to be dropping off rather steeply.

I think a lot of what happens depends on how hard it is to get jumbo loans this spring. There’s lots of talk in the media about how the mortgage crisis is not going to be confined to sub-prime. At the same time there’s talk about allowing Fannie Mae and Freddie Mac to accept larger loans. And then there’s talk about foreigners cutting back on lending money to USA. Talk, talk, talk….

So, I’d argue that if jumbo loans continue to be difficult to get, and maybe even get more difficult to get, then the top end will start a quick decline. But if jumbo loans are easy to get this spring, then all bets of declining top end are off.

The problem is I find predicting the future a rather difficult endeavor. Will jumbos be tough to get in the spring? Beats me.

XBoxBoy

While upper priced properties have been lagging, I’m not sure if it will stay that way. The credit crunch has hit the jumbo loans more than the low end loans. Consequently the number of sales in the high end seems to be dropping off rather steeply.

I think a lot of what happens depends on how hard it is to get jumbo loans this spring. There’s lots of talk in the media about how the mortgage crisis is not going to be confined to sub-prime. At the same time there’s talk about allowing Fannie Mae and Freddie Mac to accept larger loans. And then there’s talk about foreigners cutting back on lending money to USA. Talk, talk, talk….

So, I’d argue that if jumbo loans continue to be difficult to get, and maybe even get more difficult to get, then the top end will start a quick decline. But if jumbo loans are easy to get this spring, then all bets of declining top end are off.

The problem is I find predicting the future a rather difficult endeavor. Will jumbos be tough to get in the spring? Beats me.

XBoxBoy

I guess I don’t agree that financing (jumbo loans) will be the driving force behind higher end homes depreciating due to the conforming limit being only 417k. It just is such a low limit that it affects buyers in a much lower strata more then those in the million dollar club.

If the conforming limit were say 800k then I may bite. With only 417k as the limit then you still have to come in with over 300k cash if you want to buy a 750k which is definitely not what I would call a high end home. You kinda see what I mean xbox?

****

In general high end homes > 1.5M have actually been coming down in price. There is alot less visibility to the phenomenah because of many factors, including less overall demand, DEFINITELY sticky sticky sellers, and a much less motivated class of seller. There ARE cases of distress in this price range but in a much smaller proportion to lower end housing. Certainly if you look in say Eastlake you will more then likely see perhaps 50% of the comments in listings say short sale or REO. However do the same sort of search in a million dollar neighborhood and you will be lucky if you find 5% of the comments with those remarks. So it is clear that there is a lack of distress in these areas. Does that mean it will be like that forever? Of course not.

However the bottom line is that it will indeed take more patience for someone looking in these types of areas for a bargain. Maybe a few months and of course a single pop up here and there may occur, but for someone who expects widespread drops and picks of nice properties at substantial reductions, I think more likely you are looking into 09-10.

SD Realtor

I guess I don’t agree that financing (jumbo loans) will be the driving force behind higher end homes depreciating due to the conforming limit being only 417k. It just is such a low limit that it affects buyers in a much lower strata more then those in the million dollar club.

If the conforming limit were say 800k then I may bite. With only 417k as the limit then you still have to come in with over 300k cash if you want to buy a 750k which is definitely not what I would call a high end home. You kinda see what I mean xbox?

****

In general high end homes > 1.5M have actually been coming down in price. There is alot less visibility to the phenomenah because of many factors, including less overall demand, DEFINITELY sticky sticky sellers, and a much less motivated class of seller. There ARE cases of distress in this price range but in a much smaller proportion to lower end housing. Certainly if you look in say Eastlake you will more then likely see perhaps 50% of the comments in listings say short sale or REO. However do the same sort of search in a million dollar neighborhood and you will be lucky if you find 5% of the comments with those remarks. So it is clear that there is a lack of distress in these areas. Does that mean it will be like that forever? Of course not.

However the bottom line is that it will indeed take more patience for someone looking in these types of areas for a bargain. Maybe a few months and of course a single pop up here and there may occur, but for someone who expects widespread drops and picks of nice properties at substantial reductions, I think more likely you are looking into 09-10.

SD Realtor

I guess I don’t agree that financing (jumbo loans) will be the driving force behind higher end homes depreciating due to the conforming limit being only 417k. It just is such a low limit that it affects buyers in a much lower strata more then those in the million dollar club.

If the conforming limit were say 800k then I may bite. With only 417k as the limit then you still have to come in with over 300k cash if you want to buy a 750k which is definitely not what I would call a high end home. You kinda see what I mean xbox?

****

In general high end homes > 1.5M have actually been coming down in price. There is alot less visibility to the phenomenah because of many factors, including less overall demand, DEFINITELY sticky sticky sellers, and a much less motivated class of seller. There ARE cases of distress in this price range but in a much smaller proportion to lower end housing. Certainly if you look in say Eastlake you will more then likely see perhaps 50% of the comments in listings say short sale or REO. However do the same sort of search in a million dollar neighborhood and you will be lucky if you find 5% of the comments with those remarks. So it is clear that there is a lack of distress in these areas. Does that mean it will be like that forever? Of course not.

However the bottom line is that it will indeed take more patience for someone looking in these types of areas for a bargain. Maybe a few months and of course a single pop up here and there may occur, but for someone who expects widespread drops and picks of nice properties at substantial reductions, I think more likely you are looking into 09-10.

SD Realtor

pfflyer, if you haven’t already done it, you may want to check out Rich’s Dec 26 post “October Case-Shiller Prices”. The picture says as much as anyone here knows, I suspect.

raptorduck, another poster looking for a high-end home, doesn’t appear to be in any rush, so I suspect he sees more downside potential for high-end prices than upside. But I’ll let him speak for himself.

Patient renter in OC

pfflyer, if you haven’t already done it, you may want to check out Rich’s Dec 26 post “October Case-Shiller Prices”. The picture says as much as anyone here knows, I suspect.

raptorduck, another poster looking for a high-end home, doesn’t appear to be in any rush, so I suspect he sees more downside potential for high-end prices than upside. But I’ll let him speak for himself.

Patient renter in OC