Existing Home Sales And "True" Measure of Market--Hearst Mansion
Today, the Realtors tried to argue that the housing market is “scratching the bottom,” or at least that’s what their chief economist Lawrence Yun said. Sorry Lawrence, as usual, I don’t buy it. Sure, sales were basically flat in January, down just 0.4 percent from December (although down 23.4 percent from a year ago), but far more telling of the market is the price and inventory numbers.
Inventories continue to go up, now to a 10.3-month supply, which is, on a month’s supply basis, over 50 percent higher than a year ago. Prices are still down nationwide, and I got an interesting admission from the Realtors on that one today as well.
A week ago they reported in their quarterly metro home price survey that half the markets in the nation were seeing price increases and half decreases, so it’s really a split. Okay, that may be, but the markets seeing the price increases are the smaller markets. The big markets are all dropping.
“The price declines are happening in more populated regions in Miami, in California markets, so overall we are seeing more people impacted negatively on the price drops,” Mr. Yun admitted today.
Hearst Mansion Sold at Auction
Ok, but now moving on to a better indicator of today’s housing market. The oceanfront south Florida mega mansion owned by the widow of publishing heir Randolph Hearst went on the auction block this morning at the Palm Beach County Courthouse.
There are 40 million dollars worth of loans on the 52-room mansion, but it wouldn’t sell on the open market, so it sold for 22 million dollars but to the actual lender, who already has a 40 million dollar credit of course. They just wanted to drive up the price because now they will sell it for higher. Golfing great and nearby neighbor Greg Norman was in the auction room. He didn’t bid, but he was seen canoodling with the lender’s attorney.
“I was just interested to see what would happen with it, to see how many people were interested in it,” Norman told reporters at the courthouse. “Market’s a little down right now. It’s obviously a valuable piece of property, considering the size of it. It’s a great location. Like I said--I’ve got a piece of property on Jupiter Island--it’s got about a little more acreage than that. So I was just interested in seeing how it would pass up. Notice I didn’t bid.”
I guess Norman’s just like everybody else out there, trying to get a great deal on a foreclosed home, even a 40 million dollar foreclosed home. Ms. Hearst could not be reached for comment.
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