It’s a tale of two housing markets out there. While low and mid-priced homes are enjoying a resurgence, high-priced residences are languishing unsold, their prices falling rapidly, the Wall Street Journal reports. “We’re extremely oversupplied,” says a real estate agent in an affluent Illinois town, where just 13 of the 65 homes on the market have sold this year. “Sellers are struggling to realize that we’re back to 2001-02 prices.”
The divide is caused in part by federal policies. First-time buyers get a tax break of $8,000, for example, but only for those making under $75,000. The FHA now backs mortgages, but only below a certain limit. That’s left the high-end market facing high rates, and would-be buyers struggling to sell their current homes. But Washington understands their pain; Tim Geithner is currently renting out his New York home, which failed to sell.