13 WTHR - Indianapolis News |Market not improving for higher end homes

Market not improving for higher end homes

Chris Proffitt/Eyewitness News

Hamilton County - Some home sellers in central Indiana's high-end neighborhoods are hurting. Sales of homes priced at $1 million or more are falling and lower-priced homes are also hitting the skids.

The nation's recession and real estate slump has wiped out billions of dollars of value from owners of the American dream. But the mansion market, which typically survives economic downturns unscathed, is hurting. According to the Institute for Luxury Home Marketing, there are 20 percent more homes above $1 million for sale and it's taking longer - up to 185 days - to sell them.

Real estate brokers say that across the Indianapolis area, there are over 300 homes listed above a million dollars.

"The absorption rate is pretty challenging. We're selling about three homes a month in 2009 above one million, so we have somewhere in the range of a nine-year supply of homes above one million right now," said real estate broker Greg Cooper.

Real estate experts say that the luxury niche was the last segment of the real estate market to slow. But tight credit, job losses and shrinking household wealth have created turmoil in the mansion market. A survey shows that 41 percent of luxury homes for sale as of the first week in June, have had a price reduction in the past three months.

One of the most publicized homes on the market for over a million dollars belonged to Marcus Schrenker and his wife. The disgraced Geist money manager's home is for sale for $1.5 million. The more than 10,000 square foot waterfront home was listed for sale this month.

Another celebrated home, which once belonged to Conseco founder Steve Hilbert, has been on the market for four years with an asking price of $20 million, but so far, there have been no takers.

While real estate experts say the market's stabilized for homes below $350,000, it's a different story on the higher end of the market.

"You get beyond $500,000, $700,000, beyond a million, there's been no such recovery whatsoever," Cooper said.

That means for affluent buyers, "McMansions" stuck on the market may come at fire sale prices.