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.
