A piece on CNBC today is spot on about where the luxury market is heading in 2010. In my opinion, underlying demand has reached a bottom which is great news, unfortunately the bottom is a sloppy one and there will not be a hockey stick increase in absorption.
In the luxury residential market, a significant percentage of properties were purchased as second or third homes and the prospect of being underwater by 25% to 50% is a recipe for many sellers to simply look for ways to walk away and mitigate further losses.
It will be very interesting to see this play out.
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