Some might say that the housing slump in the United States is over. Shocked? It's true but not for the common man. If you happen to be a millionaire with a bunch of houses ready for sale, the world is your oyster because you could be on the verge of getting a whole lot richer. According to the Associated Press, multimillion-dollar homes in Birmingham, Michigan, for example, are back on the market, and the bidding wars are fierce. The agency reports a 21% rise in sales last month from the previous year's numbers. And while the sun shines brightly on this side of the fence, related services and providers are also being positively impacted by the boost from consumers with disposable income. The local country club has dropped its discount offers, and the retail stores are bustling with activity.
A few miles away in Detroit, however, one sees a completely different picture of the same housing industry. Here, the prices are so low, they rival amounts paid during the Great Depression. In this part of town, and indeed for most all of the low-to-mid income neighborhoods and cities throughout the country, prices continue to stagnate and foreclosures are the cause of the hour. The nonluxury sector of the housing market has seen a drop in price of over 30% since 2007.
The stark contrast comes as a surprise since, historically, both luxury and regular housing markets have risen and fallen in tandem. The current situation is a rather glaring reminder of the old adage that the rich get richer and the poor get poorer. President Obama has evidently taken note of the situation with his recent proposals to implement a new tax on millionaires"”a plan that has not received much support from Republicans and conservatives. The "?Buffet Rule," named for Warren Buffet, was intended to target only those millionaires who paid a lower tax rate than middle-class families.
But it's not just wealthy Americans snatching up luxury homes in the United States. In some states, foreign buyers make up a third of this investment in the US housing market for both luxury and regular homes. In some ways, this is a golden opportunity for the country, which is in dire need of an economic boost.