For at least the last 6 years, I've watched the luxury home market get clobbered, but not all of it. Sellers who continued to improve and maintain their homes, and those living in manageable homes did okay. It's the 10,000 sf and over market that continues to take big hits. I understand that Realtors don't want to hear this, and many continue to say "there will always be a market for grand homes," but let's not forget the world we live in now. The recession/depression didn't just affect the middle class, and while people who are financially well-off may be able to afford a 10,000 sf home, my experience tells me many just don't want it anymore.
While it may be difficult to muster up a lot of sympathy for those in this position, the economy rattled their cages, too, and there's nothing quite like watching your savings and investments plummet in value to make you take stock of the way you see your future.
My question is still this: what happens to the overflow of huge homes when there aren't enough buyers who want them? Let's not forget that many of these homeowners are part of the Baby Boom generation, and are in the process of downsizing. From the stats I've seen, there simply won't be enough buyers interested in high-priced, high-maintenance homes --- so, again, what happens to them? So far, we've seen many sturggling to avoid foreclosure, and even more losing all or most of the equity they had in their homes.
This isn't exactly what most would have thought the golden years would look like.
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