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September 05, 2010

HIGH END HOMES FEELING PRICE PINCH
The prices of luxury homes are down from last year in the San Francisco, Los Angeles and San Diego areas. A few real estate agents believe that the present quarter may see prices drop even further. This information was reported by the First Republic Prestige Home Index.

Upper end home prices in the San Diego area were down by 2.1 % from this time last year and dropped 0.3 % from the figures of the first quarter of 2010.

Despite these slight downward price moves, homes in most of the upper end communities throughout the state retained their value during the second quarter of this year. Prices seem to be stabilizing since the first part of 2010. While prospective purchasers are a bit hesitant as a result of the current state of the economy, the amazingly low mortgage interest rates are still enticing some buyers to take the plunge.

The wealthier people who purchase luxury homes may have a large portion of their wealth invested in the stock market, the performance of which could possibly determine their decision to buy or not to buy.

One Real Estate Executive believes that, while the second quarter of this year may be quite a bit better than the third quarter, it is difficult to project what may happen due to the disturbances in the market cycles. As sales volume picks up, there may well be a slight increase in prices over the next two years.

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