High end homes defy market downturn

Using data from the real estate research firm DataQuick Information Systems, The New York Times shows that the story of today’s real estate market is really two different stories. While the low end and middle of the road home prices have been hit hard recently the high end homes have fared better.

In the Boston area, for instance, the number of homes selling for at least $1 million plummeted to 619 in the first five months of 2006, from 773 in the period in 2005, according to DataQuick. But the number jumped to 711 in the first five months of this year.

Affluent families continue to do better than others, thanks to healthy income gains and a rising stock market. The upper end of the market has also been helped by an influx of well-off foreign investors whose buying power has grown with the recent decline of the dollar. Hard as this may be for an American to imagine, New York, San Francisco or Miami can now seem like a bargain, compared with London, Moscow or Sydney.

As Mark Zandi, chief economist of Moody’s Economy.com, summed up the market: “The low end is getting creamed. The middle is struggling. The high end is running on its own dynamic.”

High end properties in Sarasota have taken a hit. However, they have held up better than the rest of the market. For example, back in 2005 you would be hard pressed to find a canal front lot on a Bird Key canal for less than $1.3 million. This year there have been two canal front tear down homes sell for $910,000 and $1,150,000.