Daily Real Estate News  |  November 20, 2008  |   Trading Down Is the New Real Estate Reality
The mortgage crisis initially impacted lower-end homes purchased with subprime mortgages, but the financial fallout is spreading to cover dwellings priced above $500,000.

While residential price declines are making these properties more affordable, homeowners are discovering that their mortgage balances now exceed the value of the real estate. Even California, Florida, and New York have been hit hard--mainly due to the impact of the financial mess on the global economy.

The Institute for Luxury Home Marketing's Luxury Market Report indicates a 5.4-percent drop in upscale residential prices since the start of the year, and the number of days these homes sit on the market rose to 148 today from 125 in January. "People want to know where are we headed, how serious [the downturn] is going to be, and what is the duration," says Institute for Luxury Home Marketing founder and CEO Laurie Moore-Moore. "There are enough questions that at even the top of the market people are waiting and watching."

Source: Business Week, Prashant Gopal (11/08)

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