I was struck today by a comment from Dollie Lenz of Prudential Douglas Elliman. She deals with the highest of the high-end properties; the ones that everyone has been saying are immune to any troubles in the mortgage market. These folks aren't subprimers; in fact, many of them don't even take out mortgages.
Here's what she said in a panel discussion on the effects of mortgage rate hikes:
"I think from a $10 million and up buyer, there is definitely a change in the last three weeks. It is a very rapid change, to the quickest change I have ever seen in the marketplace, where people are really thinking about their purchases versus just running in and making a bid and securing the property. They're taking longer to think about it and looking at more things and taking a breather."
I think it's the "taking a breather" part that scares me a bit, because once the market takes a breather, well, a lot of folks start to lose their collective breath in a panic. There was a story running on the wires this morning about a bidding war on a Manhattan apartment where the winning bidder actually pulled out in the end. This is likely the exception, not the rule, but the wires jumped on it, as we big bad worry-monger media often do.
New York City has seen sky-high appreciation over the last few years, not to mention huge growth in new buildings. Now, one could argue that there is limited space on the isle of Manhattan, and that will inevitably save things in the end. But NYC has seen trouble in housing before; don't get me wrong, I don't think we're going to see it now, but when the multimillion types get worried, we all have to think about the little people.
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