An interesting report from Reuters regarding so called “up-market” or “high-end” residential housing. As the past year has shown is the influence of the economic crisis at Baja Mexico very much tied to the US market, in particular related to investments and building such projects. Many expected buyers stayed shy of the market at the Baja facing the grimm reality at the states and cope with that circumstances.
Despite some signs that the worst of the U.S. residential housing crisis may be over, many wealthy homeowners are still being squeezed by the combination of weak home prices and the stock market crash. “I think for wealthy homeowners it will get worse before it gets better,” said Dennis Hedlund, founder of iEmergent, a forecaster for mortgage and real estate companies. “I don’t think home prices have bottomed yet. Many people are stuck at the high end, as there aren’t many buyers out there,” Hedlund said of owners of luxury properties. From California to Massachusetts, the U.S. housing crisis came after years of easy credit and soaring property values. Towns like the western Chicago suburb of St. Charles saw an unprecedented growth of wealth, especially in high-end homes.
The national luxury market is weak on both the buyer and seller sides, coast to coast. Wealthy homeowners have seen cash reserves erode from the stock market collapse, which also hit retirement savings. The big drops in home prices have squeezed home equity loans. And many high-earners have also lost jobs. “High-end owners have been hit from all sides,” said Cora Berkery, a realtor at Surterre Properties in Orange County, California, site of Disneyland and hundreds of million-dollar homes.
“Shadow inventory has become the industry buzzword over the past few weeks,” said Michael Lefevre, head of the National Association of Mortgage Professionals. “There is a lot of property out there that is yet to hit the market and could mean 2010 will be worse than 2009.” Read more here…