| Copyright (c) 2009 Frank Patrick | | | | to see the bottom of the housing market. And that |
| Million-Plus ?McMansions? To Be Next Big REO Listing | | | | also means a lot of homeowners holding big |
| Category | | | | mortgages on million-plus properties who are waiting |
| Up until now, the middle class has been hardest hit by | | | | for a big real estate rebound are only going to be on |
| plummeting home prices and a bad real estate market. | | | | the receiving end of big, big disappointment. |
| This has resulted in massive mortgage defaults, the | | | | Looking at the most recent housing data from Orange |
| tidal wave of foreclosures and the historic high number | | | | County, California, home to a huge number of |
| of REO listings available. | | | | ?McMansions,? it?s clear that lower and mid-tier |
| The upper middle class and high-end homeowners | | | | housing has stabilized to some extent, with inventories |
| who thought they would be able to dodge the | | | | finally shrinking. But what?s also clear is that the higher |
| foreclosure bullet now appear to next in line for | | | | end homeowners aren?t accepting the costly reality of |
| foreclosures. Most of them who needed to sell have | | | | the current real estate market. |
| been counting on renting out their homes for a year or | | | | Look at the numbers and judge for yourself: |
| so ?until the market comes back? ? while burning | | | | ? Homes priced at under a half million will take about 6 |
| through their own personal capital at an alarming rate. | | | | or 7 weeks to sell |
| The truth is, even with prices off an average of 30%, | | | | ? Homes from $500,000 to a million will take about 10 |
| home prices are still too high. The recent good news | | | | to 11 weeks |
| about improved sales has everything to do with | | | | ? Homes over a million ? over 13 months |
| agents and sellers giving up and not much to do with | | | | What that means is that, with the economic picture as |
| buyer interest. REO properties are definitely a hot | | | | it is, most million-plus properties simply won?t sell in the |
| commodity now ? because of their price, they?re | | | | timeframe most owners require them to. Many |
| seen as a deal and a great investment. The rest of | | | | experts agree that these larger properties are |
| the activity is mostly due to desperate homeowners | | | | currently overpriced by as much as 50%. That |
| willing to deal and short sales. | | | | foreshadows a price collapse in this market tier |
| You can blame growing unemployment and economic | | | | identical to that which hit lower end housing ? where |
| stagnation for the real estate market (aside from REO | | | | the huge REO property boom has been focused so |
| homes) continuing to languish. There?s just not a lot of | | | | far. |
| cash or credit around ? and that means we have yet | | | | |