However, according to CNBC.com, South Florida is hardly alone in its mega dollar housing doldrums. Using highlights from 39 cities, CNBC paints a relatively bleak picture of the high end market. Only Houston at 3.2% and New Orleans at 3.4%, have seen improved overall housing prices since 2007, according to the National Association of Realtors.
The smallest drops in price since the plateau in real estate prices have been in Charlotte, North Carolina, and Omaha, Nebraska, which dropped only about 3%, while Phoenix has almost halved in value since 2007. It is worth noting that those cities whose values have dropped very little were not victims of the original run-up in prices. Cities where values have dropped precipitously also saw double housing inflation between 2003 and 2007.
Nonetheless, the million dollar homes in virtually every city in the nation are selling at large discounts and are remaining on the market for far longer than they did 2 years ago. An overwhelming reason for this drop in purchases is that jumbo mortgages (in amounts of more than $417,000) have become more expensive to carry and harder to fund. Also, many former millionaires have been affected by the economic crisis and have determined to purchase homes that serve as shelters, rather than as showcases.
In cities such as San Francisco, $1 million dollars in 2007 bought about 1150 square feet; now it buys an additional 400 feet. In Las Vegas, time on the market increased from 220 to more than 260 days, and the size of the house available for $1million has increased by 50% to 5400 square feet.
While square footage statistics and time on market vary from city to city, South Florida residents can take comfort that we’re not alone in being awash in pricey real estate. Million dollar homes are languishing all over the country, and values are down. In South Florida, homes listing for $1 million and more average well over 100 days on the market. One particular waterfront home has been waiting for a buyer for almost 4 years.
For those who are waiting to scoop up expensive real estate in South Florida, this is an excellent time to purchase. While homes in the $400,000 and under range are selling at close to asking price, the million dollar mansions, often with water views and dock space, are showing discounts of up to 30% off their current asking prices.
Written by Marc Jablon, Realty Associates
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