Not only are sales slumping at the upper end in the U.S., but those properties that find buyers are selling at distress prices. And some say it can get only worse.
There is ample evidence of problems on high. For example, the Case-Shiller composite indices show an increase in median prices in the 10 and 20 cities it tracks. But the medians aren’t going up because housing prices in general are rising; prices seem to be going up only because falling prices for more expensive properties now starting to be sold are dragging the median up.
Case-Shiller is value-weighted, which means that repeat transactions on expensive homes have an outsized impact.
An analysis of 390 metro areas by John Burns Real Estate Consulting found that 39% of markets are now reporting a month-over-month increase in the median price, up from 22% of all markets two months ago, according to the Wall Street Journal. There’s considerably more detail on the U.S. housing market in the last two issues of my biweekly newsletter.
“What is really happening is that people are now comparing the price on a 3-bedroom home in a typical neighborhood to the price on a 3-bedroom home in a poor neighborhood–because that’s what was selling several months ago,” says the consultant’s report.
Housing is fast dividing into two markets: Continue reading