In Boston, for instance, the number of homes selling for at least $1 million fell to 619 in the first five months of 2006, but jumped to 711 in the first five months of this year, about equal to sales during the same period of 2005, which was a boom year.
The same situation is true for New York City; San Jose, Calif.; Seattle; Denver; and Houston. At the same time, in San Francisco, Los Angeles, Phoenix, and Miami, high-end sales are down but not by nearly as much as sales in other price segments.
There appears to be three main causes of the split in the market. First, affluent families continue to do better financially than others, thanks to healthy income gains and a rising stock market. The upper end of the market has also been helped by an influx of well-off foreign investors whose buying power has grown with the recent decline of the dollar.
Finally, both the recent rise in interest rates and the problems in the mortgage market have had a much bigger effect on low-income and middle-class buyers than affluent ones. It's become harder to get a subprime mortgage, while the uptick in interest rates this year has added about $100 to the monthly payment on an average 30-year fixed-rate mortgage.BLOG COMMENTS POWERED BY DISQUS