Housing Bust in Aspen Imminent?

Author:	Lucas Jones
Source:	Homes Discovered
Date:	September 1, 2006

Mortgage rates continued to fall for the sixth straight week which is off-setting the earlier gains the rates have recently taken.  This has provided some immediate relief but the rates are still fairly high.  In contrast to this good news, housing sales continue to slack off and inventories of homes are rising.  Builders are getting hit real hard as they are not used to this kind of stagnation.  Lenders are also feeling the pain as their business continues to hurt from a lack of home sales in the Aspen area.  The entire home investment market is feeling the effects of this sluggish market. People may also be put off by the relative inactivity of home values.  As home values ballooned to astronomical numbers in Snowmass last year, they have yet to come back to Earth even in this buyers market.  Homeowners are extremely reluctant to drop the asking price on their home and realtors echo their client's reluctance since they get paid a percentage of the asking price.  Concessions are being made by sellers but such under-the-table discounts are not recorded in realty publications.  This puts off many buyers because they are not going to settle for a inflated home price when there are so many on the market.  The sellers are distorting reality with their concessions.  Nobody is willing to accept the fact that home prices, at times, drop. The bubble is poised for a bust.  This is not a good thing to hear but it is slowly becoming reality.  Many who bought run-down homes for rediculous prices last year have already spend their inflated equity and now can't sell or refinance.  If the bubble does burst it could bring a recession with it that would effect many more than those in the real estate business.

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