I think whatever happens to the $2M+ crowd will determine the direction of the market.
Right now there’s a flood of $2-5M homes. RSF has 2 years of inventory in that price range. You can’t spit without hitting a $2M custom listing in Santaluz.
If those sellers start dropping their prices aggressively, others will be forced to follow suit. So it seems to me a “who can afford to wait the longest” game.
sdr has good points about original owners who don’t have to sell. But on the flip side, my uncle builds high-end spec homes for a living. Over the past 2 years he has narrowly avoided certain death on more than one occasion. Many spec builders still need financing and in a place like Santaluz, a builder might be carrying at $15-20k/month until they (a) find a buyer or (b) exhaust their cash and get foreclosed on.
