Which Way? The Market Diverges
by Osman Parvez
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Dean Baker is reporting on the divergence between high and low-end homes. He writes, “In several of the former bubble markets higher end home prices appear to be stabilizing, while prices for homes in the bottom tier continue to fall rapidly.”
In the Case-Shiller data for markets Baker examines, the low end is dropping rapidly while the high end is better holding its value. In LA, the bottom 1/3 fell by 3.2% in June and 12.2% quarterly. The top 1/3 fell only by 0.2% and 0.8%, respectively. He notes similar patterns in other markets.
As you know from reading House Einstein, the same pattern presented itself this summer in Boulder. According to the House Einstein Indexes, at the low-end prices on a $/SQFT basis in 2Q08 were flat from a year ago (0% appreciation). Meanwhile, prices for luxury homes were up 2.8%. The confusing part is that the high-end of the market here in Boulder had much larger inventory relative to sales, nearly 19 months as of the last Index (July 15th). The low-end had less than half that, about 8 months of inventory.
Original image: thetruthabout
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The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties. We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate.
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More about the author
Osman Parvez
Owner & Broker at House Einstein as well as primary author of the House Einstein blog with over 1,200 published articles about Boulder real estate. His work has appeared in the Wall Street Journal and Daily Camera.
Osman is the primary author of the House Einstein blog with over 1,200 published articles about Boulder real estate. His work has also appeared in many other blogs about Boulder as well as mainstream newspapers, including the Wall Street Journal and Daily Camera. Learn more about Osman.
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