High End Home Sales

Pain is spreading

That’s because homes priced at the half-million mark – and higher – are now also beginning to shrink in value. Initially, the properties hit hard by the subprime crisis were lower-priced dwellings more often than not bought by people with poor credit. But now, as too many of us are experiencing, the pain is spreading even to people with good credit and higher incomes.Until recently, sellers in wealthy neighborhoods were somewhat protected from the subprime credit crisis and were still drawing buyers with high salaries, good credit scores, and a cushion of savings. But the problems worsened after Lehman Brothers collapsed on Sept. 15 and credit markets froze, corporate giants laid off thousands of highly paid workers, and the stocks that padded the portfolios of the wealthy plummeted.And even once seemingly impervious markets such as New York City, Florida, and California, which had attracted well-heeled international buyers looking to take advantage of a weak dollar, began to struggle as the global economic slowdown washed over Europe, Asia, and even the Middle East.

Luxury home asking prices nationwide have fallen 5.4 percent since Jan. 4, and homes now stay on the market for 148 days compared with 125 days at the beginning of the year, according to The Institute for Luxury Home Marketing’s Luxury Market Report, which tracked prices through Nov. 7. The data – compiled by Altos Research – look at prices in the top 10 wealthiest zip codes in 30 large metro areas around the country.Waiting game“The entry level of the upper tier – the $500,000 price point and up – has been softening for a while,” said Laurie Moore-Moore, founder and CEO of the Institute for Luxury Home Marketing, a Dallas-based group that trains high-end agents.

“What we’ve also seen in the last month is huge uncertainty at the very top of the market. People want to know where are we headed, how serious [the downturn] is going to be, and what is the duration. There are enough questions that at even at the top of the market people are waiting and watching.”Art Tassaro, a Realtor with Friedberg Properties in the wealthy New York suburb of Cresskill, N.J., said buyers have all but disappeared in the past few months. Sellers who want their home to move quickly need to be aggressive about pricing. One method is to average the three lowest sales prices in a given neighborhood during the past year and then discount that price by another 5 percent, he said.“If it was bad before, it’s worse now,” Tassaro said.