Housing.com News, Analysis & Opinion: Buying And Selling: The Great Divide

"You need to have $800 million to see it," says David Barrett, who represents the San Francisco house for Warwick Properties Group. "And at least once a week, we get a prospective buyer who has that."

Who ARE these people that can drop $800 million and yet still worry about being outbid, I wonder? It's like pondering the federal deficit...the numbers are just so cartoonishly huge that you can't even be envious.

The march to wring every last bit of development money out of overpriced areas continues apace, and good ol' grungy Hollywood is no exception, it seems:

The Broadway Hollywood is nearly sold out after just two weekend sales events, with prices from the high $500,000 range to $3 million.

"What you have is people that maybe two years ago would never have thought about buying in Hollywood are now literally fighting amongst themselves for units," said Kate Bartolo, vice president of development for The KOR Group.

This is a great triumph for urban renewal and New Urbanism, but at $2400 a month, I better be getting a personal pedicure, ball wax, and hand-fed truffles with my utilities. :)

I am often left to wonder about the process of buying in such overheated markets. If there are always buyers willing to pay at these prices, where do they come from? What kind of moves did they make to pay those prices? Were they all careful, smart, and wise investors, putting money aside in high-yield savings accounts, diversified stock portfolios, and not following the trends of everyone telling them what was hot and what wasn't?

Today, foreclosure looms over their $129,000 home. That’s a problem facing a growing number of Americans, who are finding themselves one crisis away from financial ruin. RealtyTrac, an industry organization that maintains a nationwide database of foreclosures, says mortgage defaults between January and March of this year numbered 323,102 compared with 188,122 during the same period last year — an increase of 72 percent.

This is the inevitable outcome of a vast divide between people who throw money around like raking leaves in October, and the legions who believe that there is no other way to live than just like that--acquisition for acquisition's sake. A home as a cash machine, not a place to live and grow old in. The end result is shattered dreams, wrecked credit, acres of wasted land, and short-term profit exchanged for long-term smarts.

It'll get better, but it's going to get a lot worse first. Oh, and I'd give someone else a ball wax to get a home for $129,000 in D.C. If it's that bad out in the sticks, imagine how much worse it is in the urban centers...

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Forbes has the latest rundown on the most expensive homes in America. What's amazing about this is that the prices are not only beyond the reach of virtually every normal person in the country, but they're so absurdly priced that even your average millionaire might not be able to swing it: "You need to have $800 million to see it," says David Barrett, who represents the San Francisco house for Warwick Properties Group. "And at least once a week, we get a prospective buyer who has that." Who ARE these people that can drop $800 million and yet still worry about being outbid, I wonder? It's like pondering the federal deficit...the numbers are just so cartoonishly huge that you can't even be envious. The march to wring every last bit of development money out of overpriced areas continues apace, and good ol' grungy Hollywood is no exception, it seems: The Broadway Hollywood is nearly sold out after just two weekend sales events, with prices from the high $500,000 range to $3 million. "What you have is people that maybe two years ago would never have thought about buying in Hollywood are now literally fighting amongst themselves for units," said Kate Bartolo, vice president of development for The KOR Group. This is a great triumph for urban renewal and New Urbanism, but at $2400 a month, I better be getting a personal pedicure, ball wax, and hand-fed truffles with my utilities. :) I am often left to wonder about the process of buying in such overheated markets. If there are always buyers willing to pay at these prices, where do they come from? What kind of moves did they make to pay those prices? Were they all careful, smart, and wise investors, putting money aside in high-yield savings accounts, diversified stock portfolios, and not following the trends of everyone telling them what was hot and what wasn't? To coin a phrase, sadly, no: Today, foreclosure looms over their $129,000 home. That’s a problem facing a growing number of Americans, who are finding themselves one crisis away from financial ruin. RealtyTrac, an industry organization that maintains a nationwide database of foreclosures, says mortgage defaults between January and March of this year numbered 323,102 compared with 188,122 during the same period last year — an increase of 72 percent. This is the inevitable outcome of a vast divide between people who throw money around like raking leaves in October, and the legions who believe that there is no other way to live than just like that--acquisition for acquisition's sake. A home as a cash machine, not a place to live and grow old in. The end result is shattered dreams, wrecked credit, acres of wasted land, and short-term profit exchanged for long-term smarts. It'll get better, but it's going to get a lot worse first. Oh, and I'd give someone else a ball wax to get a home for $129,000 in D.C. If it's that bad out in the sticks, imagine how much worse it is in the urban centers...