Forecl—–
It’s a word softly whispered when luxury homeowners in luxe communities like Palm Beach (33480), Beverly Hills (90210), Greenwich (06831) and Rancho Santa Fe (92067) discuss their local real estate markets.
Real estate prices have been declining in many of these markets throughout the country, and some of the heavily mortgage homes are ending up as foreclosure sales. The most prominent foreclosure victim of late is Ed McMahon, whose $5 million Beverly Hills mansion was recently lost to foreclosure.
This morning, CNNMoney reports that three of the richest US zip codes saw nasty declines in home prices for the three-month period ending April 30, when compared with the prior three months. The three biggest losers?
1. Palm Beach, Fla saw a 38 percent decline in median home prices during that period, while
2. Wayzata, Minn (55391) slid 28 percent, and
3. Greenwich, Conn. dropped 15 percent.
Much of the price decline can be attributed to inflated mortgage fallout, but another transition is also contributing to the declines: Downsizing. Many of the large luxury residence owners are baby boomers who are seeking to downsize into a more convenient and connected urban lifestyle–and are doing so in growing numbers.
Not all luxury zip codes and communities are in the tank, though, according to the CNN article. For the 12 month period ending March 31, prices actually rose 18 percent in the upscale Kenilworth (60043) communiity, just outside Chicago. Other ritzy gainers included Medina, WA (home to Bill Gates just outside Seattle) with a 9 percent increase, and a 5 percent climb for Atherton, one of Silicon Valley’s suburban crown jewels.
I was actually told by another agent on the East Coast of Florida that ‘the luxury homeowners are not in trouble’. I thought that was very arrogant. She is working in Palm Beach county…hmmm.
We have many luxury homeowners in trouble here as well. It is not just for the investors/speculators and low income families who lost jobs. This is, in fact, affecting A LOT of people. While the majority of the homes were are losing are in the 100K range, we have some in ALL price ranges.
Susan,
Arrogant…or head stuck in the sand. Even Donald Trump’s Palm Beach mansion sale fell quite short of his asking price. This real estate market correction leaves few areas untouched–including the luxury real estate market.
Roberta, I LOVED this article….priceless! and the graphic is perfect.
Ines: Thank you! It’s _un to _ool around sometimes:-)
Residential dwellings built around a golf course are the latest buzzword in the super-premium housing segment of the Indian realty industry, estimated at $15 billion and growing at 35 per cent annually. The golf cities make an attractive preposition for NRIs and HNIs who together constitute 50 per cent of buyers in the premium housing segment. These high end customers are ready to pay big bucks for a sprawling home amidst the greens with a promise of high class lifestyle. So from the top brass of the corporate world to those who aspire to arrive in life, everyone finds residences built around the golf course an ideal abode. Golf home projects are exclusive projects. Slight slumps in the market that generally slow down the middle housing segments usually do not affect these projects, as the buyer is exclusive and very selective about the property. And the trend is fast spreading from metros to emerging cities. Earlier golf was restricted to a select group, but it has grown popular over the years with many middle level executives and business class taking active interest in the game. No wonder big players like Unitech, DLF, Ansal API, Omaxe and Jaypee have already taken the plunge with an array of golf-centric projects.“Golf is not just a game but it’s a symbol of urban upper class lifestyle.”For more view- realtydigest.blogspot.com
Roberta,
What an intriguing article. You certainly caught my attention.
The 4-Letter word is not discriminating, isn’t it…seems to be affecting all segments.
The lower end of luxury was affected first, since the move-up buyers weren’t there. It’s obviously started affecting more of the luxury.
With reset in Alt-A just starting… it will be interesting to see how this year finishes out. I personally believe there are many more luxury end foreclosres on the horizon.