Wealthy may be next in line in home crisis

[katty]

more:
http://www.reuters.com/article/inDepthNews/idUSN1530426720080117?feedType=RSS&feedName=inDepthNews&rpc=22&sp=true

(Reuters) Wealthy may be next in line in home crisis

Thu Jan 17, 2008 2:41pm EST By Nick Carey

HINSDALE, Illinois (Reuters) - A house in this wealthy Chicago suburb is far beyond the reach of most Americans.

Unfortunately, Hinsdale may also now be too expensive for some of the people who already live here.

"There is a section of the population here that over-extended themselves to buy here and then keep up the facade of wealth," said Sharon Sodikoff, a broker associate at local real estate agency Prudential Homelife Realty. "In the next year or so they'll be forced out in dribs and drabs."

With a picturesque little downtown area and large, expensive houses -- according to the Headrick-Wagner Consulting Group, the average home sale price here in the 12 months to September 30, 2007, was around $1.15 million -- Hinsdale seems a world away from the housing slowdown that may have brought the U.S. economy to the brink of a recession.

But even here, far from the housing crisis' epicenter, high earners with good credit may be heading for trouble as their adjustable rate mortgages (ARMs) adjust beyond their means, local real estate agents and others say. In a normal housing market they'd be able to sell, but now they are stuck.

[DJ13]

1. See?

Trickle Down does work!
;)

[Selatius]

2. They're affluent, not wealthy. Wealthy people wouldn't notice somebody with a 1.15 million home.

Maybe if you had a net worth 10 million or higher, you might be noticed. Otherwise, they would laugh at you if you claimed to be rich like they are. A typical Wall Street hedgefund manager can walk home with 10 million each year if not higher. Those people are not affected by the housing slump because of the sheer size of their wealth.

[Hestia]

4. Good point - what is it that Chris Rock says?

The difference between rich and wealth is "Shaquille O'Neil is rich, the man who writes his check is wealthy."

[katty]

6. yes, 'affluent' should be the leading word for this piece

[Double T]

3. Looks like their PLAN is backfiring!

Parachute futures are looking REALLY GOOD!!!

[sentelle]

5. obviously, then they are not rich

If they had to buy the house on credit, they are not rich.