A curious idea seems to be making inroads in communities across the country. An apparent trend was noted by Associated Press journalist Michelle Conlin in her article title Housing Market Dividing Between Rich, Everyone Else. Simply put, in the real estate market it appears the divide is growing between the “haves” and the “have-nots”.
This subject has been bandied about in blogs, websites and I’m certain in the private living rooms of people across the country. Is this a trend which is likely to continue, or is it just a “glitch” in the road to recovery for the real estate industry? Time will certainly answer this question, however a more immediate question comes to mind – at least in the case of this writer – does this particular trend apply to the Greensboro, NC market?
Taking a look at Conlin’s article, I see that her conclusion is based upon the fact that multi-million dollar properties, at least in the areas she has focused upon, are experiencing robust growth, while less expensive properties are subject to longer days on the market and in some cases, owners have been unable to sell their homes after listing it for an entire year.
The luxury market makes up a small portion of the entire industry, and its growth is not enough to boost the real estate market country wide. Conlin quotes a banker who is less than optimistic about the housing market when she states, “This bifurcation in the market is yet another reason Michelle Meyer, the chief economist at Bank of America Merrill Lynch, says her housing outlook is ‘increasingly downbeat’.”
Meyer’s statement is amusing given the fact that tightened lending standards adopted by financial institutions pose a hindrance to the market bouncing back – keeping many well qualified individuals out of the housing market.
So what does the apparent widening of the gap between “rich” and “poor” have to do with the Greensboro real estate market? Nothing, it would seem. Prices of “non-luxury” homes experienced solid growth in the last quarter. From June through August of 2011, the median price for Greensboro homes was at $148,481. This was an increase of 19.3%, or $23,981 from the quarter prior to this last, and an increase of 16.3% from 2010.
I think you would agree when I note that the median price does not reflect a “pricey” home. It’s affordable. That said, yes there are certain markets that appear to favor the “rich” as opposed to all others, but its just this kind of market (low interest rates, low sales prices) that investors dream about when sellers are calling the shots.
The analysis of real estate data can often vary between individuals (and companies), and how that data is interpreted can depend in large part upon the outlook of the person viewing it. That said, many individuals (including Fannie Mae) agree that it’s investors, both foreign and domestic, who will play a very definite role in the recovery of not only the Greensboro market, but that of the country as a whole. It’s not until lending standards have been loosened to the point of “common sense”, that investors will cease to dominate both the luxury market and the one that the majority of us deal with.