The Big Picture

« 1987 versus 2007 | Main | Forbes Video Network »

Big Drop in LI Luxury Real Estate Prices

Thursday, April 19, 2007 | 05:36 AM

in Economy | Psychology/Sentiment | Real Estate

Let's look at a few previous Real Estate discussions, and then go to the latest news:

Last August, we discussed why big housing sales drops do not produce big price drops -- at least not right away in the official data.

And, in my own backyard, we looked at all of the high end RE speculation on Long Island.

All of these concepts eventually led to a nice piece on pricing in the NYT: The Hidden Truth About Home Prices (which we discuss in detail here).

So you can imagine that it was no big surprise for us to learn yesterday that "luxury" home prices on Long Island -- defined as those costing $750,000 to $12.5 million -- have slid over 5% last quarter, as Inventory levels doubled from what they were two years ago.

Here's an excerpt:

Luxury home prices slid in New York's Long Island and Queens in the first quarter as more property came onto the market and took longer to sell, appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said.

The median sales price fell 5.3 percent to $900,000 from a year earlier and houses took 25 percent more time to lure a buyer, the companies said today in a report. An oversupply of expensive houses for sale is reducing demand, said Jonathan Miller, president of New York-based Miller Samuel, in an interview.

In the first quarter, it took owners 121 days to sell their homes, compared with 97 days a year earlier, a sign demand has weakened.

You can see why announcements from the NAR such as Home Prices Seen Rising in '07 are so absurd.

~~~

See also:

Why Housing Jobs Have Not Fallen Much

and

U.S. Foreclosure Filings Rise 47 Percent in March

Source:
Luxury Home Prices Fall in New York's Long Island
Brian Louis
Bloomberg, April 18 2007
http://www.bloomberg.com/apps/news?pid=20601093&sid=aUbPAJksJYEs&

LI Home Buyers Feeling in Control
Carrie Mason-Draffen
Newsday, April 18, 2007
http://www.newsday.com/business/ny-bzhous185175947apr18,0,2697206.story?

Prudential Douglas Elliman
LONG ISLAND MARKET OVERVIEW 4Q 2006
http://www.prudentialelliman.com/MainSite/MarketReports/ReportsMenu.aspx