Interesting that I’ve been hearing a similar thing from LA agents that Carol of the SF Chron describes: high-end markets are not getting hit hard like middle- and low-end markets.
(also interesting that she used Altos Research data to help her reach her conclusions!)
The micro-markets of San Francisco are very peculiar. For buyers it’s great right now because it’s much more of a balanced game. It’s no longer about have much over asking does one have to go to make an offer (for the most part). For realtors in the city this is great as well because your value has gone more from who you know in your micro-market to what you know about the neighborhood. Working in a district that has only seen an increase in price also proves challenging as I’ve seen a few offers in the last couple of months way under asking only to be turned down for the inevitable asking price sale.
I think a simple explanation of that is that in the low to mid markets, the typical buyer used the stated income mortgage products – now that we are using traditional qualifying guidelines, buyers can no longer afford the “average” house.
This is because the average house price does not match up with the average income / mortgage qualifying in the areas. (just look at the HAI across the country). The top end markets are not as dependent on mortgage financing, therefore not as affected.
Jessie, it’s not just that buyers can’t afford the average house, it’s that people who live in houses that were purchased using more aggressive mortgage products can’t afford to sell those houses unless they make a big gain.
I’m glad to see that pockets of high-end homes are still gaining in value, in both California and New York. Now, we just need an expansion of that process to middle America.
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