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Jumboenfreude? Most Expensive Homes Going to Be a "Problem"

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[Months needed to clear inventory/by price range/Image via Bloomberg]
There may be a new word to add to the post-bubble lexicon because a couple of JP Morgan Chase analysts have come out with some predictions that'll make the wealthiest (and developers who are trying to sell big spec houses) squirm. Given the lack of jumbo financing (those big loans needed to buy big home) and the lack of housing initiatives aimed at so-called millionaire homes, prices for the most expensive homes will take longer to bottom out, reports Bloomberg. “Currently, we have national home prices bottoming in 2011,” the analysts wrote. “However, prices for more expensive homes may not bottom out until 2012, and ultimately result in peak-to- trough declines in excess of 60 percent (compared to 40 percent nationally).”

And in an interview, one of the analysts added: “California is probably worse than other states, but higher-priced homes in general are going to be a problem." Over the weekend, the Los Angeles Times also covered the difficulties in securing a jumbo loans. "The jumbo market is not functioning," says Lawrence Yun, chief economist at the Realtors group, told the paper. "We hear from our members every day, 'Fix the jumbo market, fix the jumbo market.' "
· Millionaire Homes’ May Lose Value Until 2012: Chart of the Day [Bloomberg]