Think Your Home Lost a Lot of Value? Try Being Rich

by Will Smith

Think Your Home Lost a Lot of Value? Try Being Rich

While the entire housing market has been severely damaged over the last few years, it turns out the carnage is worst at the higher end of the market. According to CNBC, a confluence of factors — stock portfolio losses, more expensive jumbo loans, and general cautiousness — have all but dried up the demand for high-end homes.

“The high-end market relies on equities,” National Association of Realtors spokesman Walter Molony told CNBC. “If stocks are doing well, so too does high-end housing.”

The stock market plunge of the last few months has meant that the portfolios of the nation’s wealthiest 1 percent have dropped by double-digits percentages. Add to that the fact that most high-end homes require jumbo mortgages, which have become significantly more difficult and expensive to obtain. These days, borrowers need to put more money down, have a higher credit score, and pay heftier interest rates. Lastly, the bleak economic outlook has made people thriftier. The worse recession in decades is not exactly the time when people decide to upgrade from a big house to a huge one, even if the bigger house is much cheaper now than it was a year ago.

“Lower prices are not moving people to buy,” Bronxville, NY real estate agent Mary Cassidy said. “People say, ‘I have what I need, why do I need more.’ We’re not seeing many sales with jumbo loans. People are scared about the economy. The high end here is more than $2 million. There’s no market for them. It’s a lot of hand holding for sellers. Our work is even tougher.”

For an idea of just how hard the high-end market has been hit, values plummeted 47 percent from November 2007 to November 2008. Compare that with a decline of only 3 percent for homes valued below $400,000.

This article originally published at https://dc.urbanturf.com/articles/blog/think_your_home_lost_a_lot_of_value_try_being_rich/531


  1. doug said at 3:13 pm on Saturday February 7, 2009:

    The reason is because Jumbo Loans are so ridiculously priced.  There is a huge interest spread between conforming and Jumbos.  If people have good credit, income to support their purchase, and a good down payment (or equity in a re-fi), they should be afforded reasonable rates on Jumbos.  .5 or less is a more reasonable spread than 2%.

  1. Ann said at 3:50 pm on Monday February 9, 2009:

    That’s a picture of the Russian Embassy…  I have a feeling that it doesn’t matter how much value their property lost.  smile

Comments are closed.

DC Real Estate Guides

Short guides to navigating the DC-area real estate market

We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Visit guides.urbanturf.com or start browsing below!

Northern Virginia

Profiles of 14 neighborhoods across Northern Virginia

Looking to Give People A Reason to Stay Past 6pm
Happily Straddling the Line Between City and Suburb
Columbia Pike
Arlington’s Neglected Stepchild is Getting a Makeover
Crystal City
Turning Lemons into Lemonade
Lyon Village
Developing An Air of Exclusivity?
Hitting Its Growth Spurt
An Urban Village Hitting Its Stride
Del Ray
Virginia’s Small Town Near the Big City
Eisenhower Avenue
The Vibrancy Might Take a Few Years
The Quiet Neighborhood By the Beltway
Old Town
Mayberry By The Potomac
132 Commerical-Free Acres
Downtown Falls Church
Staying the Same in the Midst of Change
Tysons Corner
Radical Change Could Be On The Way

See more Northern Virginia »


Profiles of 14 neighborhoods in suburban Maryland

Small-Town Living in the State Capital
Bedroom Community Gets Buzzing Cache
Cabin John
In With The New While Maintaining the Old
Chevy Chase
Affluence, Green Lawns and Pricey Homes
Downtown Silver Spring
Experiencing a Resurgence After a Bumpy History
A Suburb on Steroids
Rockville Town Square
Despite the Dynamism, Still Somewhat Generic
Takoma Park
More Than a Little Bit Quirky
A Foodie Magnet on the Verge of Change
Capitol Heights
Kudzu, Front Porches and Crime
Glass Half Full or Half Empty?
Mount Rainier
Artists, Affordable Homes and A Silo Full of Corn
National Harbor
A Development Rises Next to the Potomac
Riverdale Park
A Town Looking For Its Identity

See more Maryland »

Northwest DC

30+ neighborhood profiles for the city's biggest quadrant

16th Street Heights
DC's Sleeper Neighborhood
Where (Almost) Everyone Knows Your Name
AU Park
One of DC’s Last Frontiers Before the Suburbs
DC’s Northern Neighborhood on the Cusp
DC’s 535 House Neighborhood
Cathedral Heights
Do You Know Where That Is?
Chevy Chase DC
Not to Be Confused With the Other Chevy Chase
Cleveland Park
Coming Back After A Rough Year
Columbia Heights
DC’s Most Diverse Neighborhood, But For How Long?
An Island of Serenity East of the Park
Dupont Circle
The Best of DC (For a Price)
Foggy Bottom & West End
Where the Institutional Meets the International
Forest Hills
Ambassadors and Adventurous Architecture
Foxhall Village
350 Homes Just West of Georgetown
Friendship Heights
A Shopping Mecca With a Few Places to Live
History, Hoyas and H&M
Glover Park
One of DC’s Preppier and More Family-Friendly Neighborhoods
A Posh View From Embassy Row
LeDroit Park
A Quiet Enclave in the Middle of the City
Logan Circle
Trendy Now, But Not By Accident
Mount Pleasant
Sought-After Homes Surround Main Street in Transition
Mount Vernon Triangle
From Seedy to Sought-After
The Long, Skinny Neighborhood at the City’s Northwest Edge
Park View
It’s Not Petworth
Penn Quarter/Chinatown
DC’s Go-Go-Go Neighborhood
Getting a Vibrancy of Its Own
The Duke’s Former Stomping Ground
Shepherd Park
DC’s Garden of Diversity
Spring Valley
A Suburb With a DC Zip Code
Not To Be Confused With Takoma Park
Not Quite Like Its Neighbors
U Street Corridor
The Difference a Decade Makes
Woodley Park
Deceptively Residential
Adams Morgan
No Longer DC’s Hippest Neighborhood, But Still Loved by Residents

See more Northwest DC »

Southwest DC

The little quadrant that could

Southwest Waterfront
A Neighborhood Where A Change Is Gonna Come

See more Southwest DC »

Northeast DC

Profiles of 10 neighborhoods in NE

New Development Could Shake Up Pastoral Peace
A Little Bit of Country Just Inside the District’s Borders
Not to Be Confused With Bloomingdale
Fort Totten
Five Years Could Make a Big Difference
H Street
A Place To Party, and To Settle Down
The Northeast Neighborhood That Few Know About
Michigan Park
A Newsletter-On-Your-Doorstep Community
Evolving from a Brand to a Neighborhood
Ripe for Investment Right About Now
The Difference 5 Years Makes
Big Houses, A Dusty Commercial Strip and Potential

See more Northeast DC »

Southeast DC

6 neighborhoods from Capitol Hill to East of the River

Capitol Riverfront
Still Growing
Hill East
Capitol Hill’s Lesser Known Neighbor
Congress Heights
Gradually Rising
Notable for Its Neighborliness
Historic Anacostia
Future Promise Breeds Cautious Optimism
Eastern Market
A More European Way of Living

See more Southeast DC »

Upcoming Seminars ▾