Lines Cross in the TreesPosted on Wednesday, February 20th, 2008 at 9:16pm.
This dividing line roughly corresponded to resales and smaller homes, at the lower end, versus new and newer homes in the upper segment.
MBC also declared that the market above $2m was glutted, particularly with new construction, several months ago – before it was hip or obvious to say so.
For almost all of this time, the majority of Tree Section inventory was in the $2m+ segment. As this graph shows (click to enlarge), there were even times when 2/3rds of inventory was in the upper segment. Demand was fairly constant through the Spring and Summer of 2007 for homes priced below $2m.
But in 2008, that has changed. We now have slightly more homes on offer in the sub-$2m range (25 versus 24). As the graphic shows, the lines have crossed.
We saw 5 sales of homes priced under $2m in the first 6 weeks of 2008, but 2 of those were new construction on which the prices began over $2m and dropped below. Meanwhile, the inventory in this segment has more than doubled from 11 at year end.
Of the 25 actives on Feb. 15, 10 were priced below $1.3m, and 3 were actually below $1m. It's been a while since we saw so many offerings at those levels. Of course, as inventory grows, there should be more deals at the lower price points.
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