paris real estate market in a slump

Good news, Bad news?

A few weeks ago the BF and I were discussing the housing market in Paris. Since we are considering the possibility of purchasing property there we were very interested in the recent statistics showing the tremendous appreciation in home values (home values in Paris were up by 20% last year - the largest gains since 1991).

The BF is in the business and living here in California knows all to well about what happens in an over inflated real estate market.

He glanced at the charts and based on his Gann knowledge of chart analysis (W. D. Gann was a financial trader and market forecaster) the comment he made to me was that the gains were  unsustainable.

Well, lo and behold, there was an article in Bloomberg yesterday which showed that the Paris housing market is down about 3% and the number of properties sold is down 12%  in the first 5 months of the year. There's been a pick up in the number of apartments offered at a discount.

There is a widening gap between prices in the more desirable areas compared to those less popular. This gap signals that the market is cooling. Paris has probably reached its peak in terms of prices. Currently a 2 bedroom apartment in the Latin Quarter sells for about 753 euros ($1.08 million). On the flip side housing in areas like those along the Seine or near Notre Dame remain higher and luxury housing rose at the fastest rate in the world in the first quarter according to an index compiled by London based broker, Knight Frank LLP.

Sellers are urged to be more realistic and may need to lower their asking price as much as 5% to get their property sold.