Owners of High End Homes Feel Pinch
Wednesday, October 14th, 2009While the overall economic trends, including those within the housing sector are heading upwards, There is still some trouble brewing in high end housing markets. The housing crash was felt in the lower end of the market first. Not surprisingly, falling home values where more immediately a concern for houses under $250,000, but with markets rebounding slowly, those owning more expensive homes are increasingly feeling the heat. Only 9.4 per cent of homeowners holding prime mortgages over $417,000 have fallen 90 days or more behind on their mortgage payments. This is significantly less than defaults on the part of subprime holders who are defaulting at a rate of 33.8. However the rate is rising. Additionally, the market for homes of higher values is smaller. The more expensive the home, the narrower the market. Losses in high end home values, often measured in percentage of peak home value, represent greater losses in terms of actual sums of money. These homeowners are in many cases more equipped to weather the downturn, but how these shrinking home values and shrinking demand will affect this population remains to be seen.
