Why expensive houses are selling

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Good morning. New York Times columnist David Leonhardt weighs in on a topic we’ve been kicking around since this blog launched: exactly why is it that the high end of the market is showing strength?

Give the N.Y. Times credit for a clever headline: ‘Can’t Sell Your Home? Maybe It’s Priced Too Low.’

Leonhardt cites the usual suspects in explaining the strong market for homes at $1 million and above: The rich are getting richer, rich foreigners are buying U.S. real estate, and the credit squeeze is much more hurtful to buyers in lower price ranges.

Economist Mark Zandi’s take: ‘The low end is getting creamed. The middle is struggling. The high end is running on its own dynamic.”

Our take: In some parts of L.A., the ‘struggling middle’ is pretty darn expensive. For example, the $2 million price range in Manhattan Beach -- certainly not the high end in that area -- has been soft for a while now.

Photo Credit: Nick Springett Photography