Last December, I criticized a Kentucky couple for complaining that their house wasn’t selling at the price they were asking. They thought they were asking a fair price, but it’s only a fair price if someone’s willing to pay it. Either price your house to sell, or wait around for someone to come along.
But an interesting article in the New York Times is saying the opposite of what I thought was common sense. Sales of high-priced homes are apparently not in a slump like those asking average prices.
This split in the market helps explain why the sales of Manhattan apartments, some of the priciest homes in the country, have remained fairly strong. The national trend has gone largely unnoticed, though, because neither the federal government nor the National Association of Realtors — the main sources of housing data — report statistics for different price segments.
The article provides some examples illustrating the different ends of the spectrum. Here’s why the market is still going strong for super-expensive homes:
* The rich aren’t affected as much by the stagnant payrolls.
* Foreign investors swoop in when the dollar is cheap.
* Low and middle income families are hurt more by higher interest rates and the meltdown of the mortgage market.
This news probably won’t help the Kentucky couple. Unless their house is seen as desirable by the affluent, they won’t benefit from raising their asking price.