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?
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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.
