By Ian McKendry

WASHINGTON (MNI) – The luxury housing market in the United States
continues to stabilize despite ongoing struggles in the broader national
market, according to industry professionals.

Bob Satawake, a Chicago based real estate agent told Market News
International that “at this point, certain segments of the market have
stabilized.”

“The luxury market is more stable,” Satawake added, saying foot
traffic has increased this year and that buyers are more comfortable in
certain market segments.

“Our open houses, we are staying busy for the entire two-hour
period in which we are open versus last year we would be lucky to get
anybody to come in and look,” Satawake said.

Data on the national as whole indicates a less stable picture. The
Case-Shiller home price index published Tuesday dipped 0.1% seasonally
adjusted and was down 4.0% year-over-year. And the National Association
of Realtors said the resale of existing-homes fell 3.8% in May and data
analytics firm CoreLogic reports that 22.7% of all residential
properties with a mortgage have negative equity.

Satawake, however, who specializes in the luxury market —
particularly Chicago’s upscale Lincoln Park neighborhood — said he is
on pace to have a better year this year in part because buyers were
“extraordinarily afraid to do anything” last year.

John Mulville, Senior Vice President at California-based Real
Estate Economics agreed, telling MNI that the “elite class” of
residential homes located in the best areas are performing well.

Mulville said wage growth in the upper income brackets have helped
high-end home prices and said certain areas in California have benefited
from the tech industry.

“We have heard about nothing short of absolute bidding wars around
the South bay area, San Francisco, some of the high-end markets”
Mulville said.

While high-end properties are performing better, it is unlikely
their performance will trickle down to the rest of the market.

“Specifically in Chicago — our middle market is experiencing a lot
of challenges, primarily due to financing restrictions,” Satawake said.

Satawake said he expects middle market homes in Chicago’s South
Loop to continue to struggle, but in no way will that impact his
business in Lincoln Park. This typifies the very local nature of the
housing market.

Federal Reserve Chairman Ben Bernanke during a news conference last
Wednesday also referenced the disconnect in today’s housing market.

“It’s interesting now that house prices overall are declining, all
of that is concentrated in distressed properties,” Bernanke said

“Houses which are not being sold on a distressed basis have much
more stable prices,” Bernanke added.

** Market News International Washington Bureau: (202) 371-2121 **

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