The beginning of 2007 took off with a flourish of sales activity. Shrewd investors took advantage of market uncertainty successfully negotiating good buys for many of the better properties here. The prediction of low and stabile interest rates and a strong economy suggested a turn around in the housing market was eminent. Then came the subprime lending fiasco which had an overall negative effect on the market.
Sellers, realizing the pool of “qualified buyers” had shrunk over night finally started making serious reductions in home prices, but there were very few qualified buyers. Therefore, the typical spring flood of properties back onto the market was met by buyers unable to make a purchase or reluctant to do so believing the downturn was not over yet.
The balance of supply and demand at the lower end of market continues to be heavily weighted toward the supply end. Here is an article that appeared in this week’s Boston Globe that addresses the fact that the housing slump isn’t over yet after all.
However, at the high end of the market, where the ripple effect caused adjustments on some prime properties, well-heeled buyers fueled by generous bonuses from the financial market are carefully picking at the prime luxury properties.
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