by Calculated Risk on 5/17/2009 09:57:00 AM

From the San Francisco Chronicle: More high-end properties sitting on the market

High-end properties are increasingly coming under the sort of pressure once reserved for moderate homes. In fact, as slowing price declines fuel hope that the real estate bottom is near, other signs suggest the worst is on its way for the region's upscale market.
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In the Bay Area, the months of unsold inventory of existing single-family homes priced above $1 million reached 14 months in March, more than double where it stood a year ago, according to the California Association of Realtors.
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[T]he type of person who might have been looking to buy a more expensive house in the past today often doesn't have the necessary equity appreciation to consider a million-dollar home.
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"When you look and see supply has increased, you ask, 'Who are the potential buyers?'" [Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University in Orange] said. "That's where the problem kicks in."

The mid-to-high end will come under increasing pressure (see House Price Puzzle: Mid-to-High End). This article touched on the key problem "Who are the potential buyers?".

Usually mid-to-high end homes are bought by move up buyers - in a kind of real estate chain reaction. However, right now a large number of sellers at the low end are lenders (foreclosure resales or short sales) and there is no buyer to move up!