High-end buyers still willing to wait for more drop

The Case-Schiller index, which is the most reliable source of home values because it calculate same home sales, dropped again in March.

As the article in the new york times reports, in the lower half of the market, where homes have dropped 50% of peak, volume has picked up.

In other words, buyers buy when fundamental economic balance is restored to pre-bubble prices.


"Dan Greenhaus of Miller Tabak noted that “interested buyers have no reason to purchase a home if they believe prices will continue to fall and those that have to buy a home have every reason to take as much time as possible.”"

Palm beach has not seen LISTING prices drop much, though SALES prices have begun to drop off 30% from peak (i.e., currently at about 2003 prices).

Once prices drop to where the fundamental economics supports sales, buyers will hop back in.

Prime mortgages get tougher to find

An article in the NY times today describes the slight rebound in sales -- that rebound is only in places that have seen prices drop MORE THAN FIFTY PERCENT from peak.

In other words, when prices go back down to pre-bubble, sales happen.


In addition, it appears that regular high-quality people looking for a norml mortgage re having a very hard time getting finance:

"....Sales in the top half of the market remain slow. The Federal Reserve reported on Monday that half of all banks recently tightened their lending standards on prime mortgages. Many would-be buyers, here as elsewhere, simply cannot get financing.

Sellers, meanwhile, are reluctant to lower their prices, preferring to bide their time. New construction is nearly nonexistent.

What drives the market here, then, are all those foreclosures....."