|
Across the country, real estate agents and home sellers in wealthy
neighborhoods who grew accustomed to seven-figure bidding wars during
the boom are feeling the sting of the housing crunch. Ed McMahon can
vouch for that. The former Johnny Carson sidekick and TV pitchman
recently saw his $5 million Beverly Hills home go into foreclosure. In fact, McMahon is a celebrity face to a broader trend. Three of the
nation's richest zip codes saw particularly steep home-price declines
in the three months ending April 30, compared with the previous three
months. Prices down, foreclosures up In Palm Beach, Fla. (zip code 33480), median home prices fell 38% during that period, according to the real estate Web site Trulia. Prices in Greenwich, Conn. (06831), dropped 15%, while homes in Wayzata, Minn. (55391), are selling for 28% less. Prices
in other wealthy towns also declined: Gladwyne, Penn. (19035), was down
6%, and Beverly Hills (90210), Lincoln, Mass. (01773), and Ladue, Mo.
(63124), each slid 2%. "What I'm finding is that million dollar
plus homes declined 4% or so [over the past 12 months]," said Don
Kelly, a spokesman for Zaio, which is building a national data base of
home value appraisals. And foreclosure data tracks the pricing
information. In Beverly Hills, filings nearly doubled to 41 in the
first four months of this year, up from 22 in the same period last
year, according to RealtyTrac, which compiles foreclosure stats. In
Palm Beach, there were 34 foreclosure filings, up from 9 in the period
a year ago. Greenwich had 23, up from 10, while Wayzata had 18,
compared with 14 a year ago. Kenilworth, Gladwyne and Medina had just
one each, while Lincoln had none. Of course, the high-priced
areas have generally held up better than overall home prices, which
plunged a record-setting 14.1% in the 12 months ending March 31,
according to the S&P Case/Shiller Home Price Index. And a handful
of posh outposts are still posting gains. Prices rose 18% in the swanky
Chicago suburb of Kenilworth, Ill. (60043), 9% in Medina, Wash., which
is home to Bill Gates just outside Seattle, and 5% in Silicon Valley's
Atherton, Calif. (94027). But many ritzy areas are finding they are not immune to the housing slowdown. Cautious buyers Drew Peterson, an agent with Weichert Realtors in Greenwich, says sales volume has slowed as buyers have become more cautious. "There
are motivated sellers, and opportunities for buyers to capitalize on
sellers downsizing," he said. Some of the owners of large estates are
moving out and resettling in Greenwich's more urban downtown area. In
the Philadelphia suburb of Gladwyne, the wealthiest town in
Pennsylvania which lies along the fabled "Main Line," the market has
also slowed, according to Judy Getson, the sales manager for Prudential
Fox & Roach in Haverford. According to Trulia, just six homes
sold in Gladwyne during the three months ending April 30, down from 14
sold in the same three months during 2003, a boom year. There are now
42 homes in town on the market for a million dollars or more, according
to Realtor.com, ranging from $1.195 million to $17 million. Getson
is seeing a downsizing phenomenon similar to Greenwich in the
Philadelphia area, although not in Gladwyne proper. "A lot of people
are moving from mansions and buying condos in the city," she said. Perhaps
the hardest hit of the 10 wealthy zips in our sample is Palm Beach,
Fla. Corcoran Group agent Paulette Koch says inventory is building up
in the "low end" of the local market there - the $2 million to $6
million range. "The volume of sales has declined," she said, "and the selling season this year started very late and slowly." The ultra-high-end has, however, been very good. "There have been records set all over the place," she said. Longer inventories Sales
are also moving much more slowly in the Minneapolis suburb of Wayzata,
according to Linda Blyth, director of previews for Coldwell Banker
Burnet. "One of our own agents had his own $4.2 million house on
Lake Minnetonka as part of the waterfront tour we do every Fall. It
sold in April, at full price, to someone who was on that tour," she
said. "People are taking longer to make a decision." Even in stronger markets, like Medina, Wash., sales volume is down. The
market slowdown has unleashed a "fair amount of inventory," said Larry
Williams, a real estate agent for John L. Scott Real Estate. And homes
are often overpriced. "Many sellers haven't figured out that it's not a
seller's market anymore," he said. Still, Williams sold a $2.2
million house recently in less than a day, with multiple offers. And he
had a waterfront lot for $4.4 million that went in nine hours. "The
stuff that is selling is going in 30 days or less, and the average sale
is more than 100% of the asking price," said Williams. But to sell, it
has to be high quality and the marketing - photos, advertising, pricing
and staging - all have to be top-drawer as well. Of course, most
of the homeowners in the country's wealthiest zip codes - hedge fund
chiefs, industrial moguls and dot-com billionaires - will probably have
the means to wait out a slump. It's doubtful that these areas will see
the flood of distressed sales that sent so many other areas into a
downward spiral. And that alone can be enough to give places like Beverly Hills a boost.
|