If you want an example of how one percenters differ from everyone else, look no further than the housing market.In a year when a pipeline of foreclosures continued to keep home prices low -- and rampant unemployment threatened the stable existence of many a middle-class suburbanite -- the luxury real estate market was booming, with multimillion-dollar properties in demand in cities around the U.S.
In 2011, buyers purchased a $28 million penthouse in San Francisco, a $31 million townhouse in New York City, and a $100 million mansion in Silicon Valley, the most expensive purchase of a single-family home on record, according to Bloomberg Businessweek.
At the same time, U.S. home prices remain near historic lows and a deluge of foreclosures-in-waiting continues to distort the market. In addition, about 15 million homeowners are still underwater -- or owe more on their homes than they're worth.
A recent 21 percent quarterly leap in foreclosures only hints at the nationwide extent of the problem: Thanks to questionable bookkeeping practices, it's taking even longer than it would normally to process the country's countless distressed properties, and prices aren't expected to rise again until the queue is cleared.
The two phenomena -- on the one hand, brisk sales of strikingly expensive homes, and on the other, a lower- and middle-class real estate market showing only minimal signs of life -- actually have a similar root cause, according to Businessweek. Property values are coming down all over the country, leading wealthy buyers to take advantage of lower prices, even as it throws countless homeowners into debt and pushes them further down the income ladder.
By any measure, affluent Americans have experienced relatively little pain as a result of the housing crash, when compared to the majority of the country. Mid- and low-priced homes have fallen in value by more than 40 percent since 2006, according to a recent analysis from valuation firm Clear Capital, cited by Time, while high-priced homes have lost only 26.8 percent of their value.
Analysts and homeowners alike have been waiting for years for the broader housing market to recover.
Despite the occasional positive indicator, prices are still well below healthy market levels, and they're likely to remain depressed as long as millions of foreclosures remain on the books.
A breakdown of November home sales suggests how bleak the financial situation has become for many homeowners. That month, nearly half of all home sales were either short sales -- where the borrower's debts exceed the value of the home -- or sales of foreclosed homes that had been repossessed by lenders, according to CNN.
Original Article
Source: Huff
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