January 8, 2007
Raphael Bostic, economist with the USC Lusk Center for Real Estate, said that in the last 18 months, discretionary sales – largely those done to take advantage of the boom of 2002-2005 and not done out of necessity – “have been taken off of the market.” As a result, the high-end portion of the market has taken a hit. “A lot of the housing frenzy just moved people to accelerate their purchases,” Bostic said. “So now that pool of people is smaller than it was before.” At the same time, affordable homes tended to see prices accelerate as demand for them stayed brisk.
According to Bostic, expect more of the same from the “bread and butter, middle of the road properties” and minimal price declines across the board.