For a period of time after the onset of the credit crisis in 2007, it appeared the high end of the residential home market had sidestepped the disaster that had befallen the rest of the housing industry. The general thinking was, moneyed folk, despite the collapse of all types of investments, had the assets to hang in there through the tough times and were not forced to sell.

While that may be true, recent numbers by a host of organizations are showing even the priciest home markets are getting smacked about. Indeed, if you have a spare $1 million to $2 million in your wallet, this could be a good time to buy.

For a period of time after the onset of the credit crisis in 2007, it appeared the high end of the residential home market had sidestepped the disaster that had befallen the rest of the housing industry. The general thinking was: moneyed folk, despite the collapse of all types of investments, had the assets to hang in there through the tough times and were not forced to sell.

While that may be true, recent numbers by a host of organizations are showing even the priciest home markets are getting smacked about. Indeed, if you have a spare $1 million to $2 million in your wallet, this could be a good time to buy.

The most recent data from the National Association of Realtors demonstrates the overall problem. According to NAR, the national share of home sales above $750,000 has fallen from 4.4 percent in 2007 to approximately 2.3 percent in 2009, and the months’ supply of inventory has risen from 18.7 months to 41.1 months during the same period.

To see what’s going on, I checked in with a couple of longtime brokers in two of the priciest home markets on either coast: the Hamptons/East Long Island region west of New York City, and Santa Barbara, Calif.

The Hamptons/East Long Island market is kind of an aberration even for pricey locations around the United States in that it boasts not just a high-end category, but a super-high-end range as well. High-end homes run between $5 million and $15 million, whereas the super-high-end is reserved for homes above $15 million and these days climbs to $40 million.

In July, Bloomberg, citing appraiser Miller Samuel Inc. and Prudential Douglas Elliman, reported that only 37 residences (condos and homes) above $2.36 million have sold this year in the Hamptons area and inventory has jumped 46 percent. It concluded it would take four years to sell the 584 homes in current inventory.

I checked in with Paul Brennan, the regional manager for Prudential Douglas Elliman’s Bridgehampton, Long Island, office, who is a veteran of 30 years selling real estate in the area.

The market in eastern Long Island stopped after mid-year 2007, says Brennan, "but I’ve seen this before. The market goes up, stops; goes up, stops; goes up, stops. Have prices declined? Only if you fall into one of the three "D" categories: death, divorce or debt. If you have to sell, then you are going to have to sell at what the market will currently bear, and it will be less than what it has been."

Otherwise, Brennan adds, "The wealthy people that we deal with don’t sell."

Apparently, there are plenty of homeowners in the Hamptons-East Long Island area who have dropped into the "three-D" category, more for debt than death and divorce, because Brennan says prices are down.

This is particularly telling in the super-high-end category, where nothing is moving. "Super-high-end homes used to sell at a rate of one every two months," he says. "There have been no sales in that category."

Brennan guesses the last home to sell in this range happened at the end of 2008. …CONTINUED

This phenomenon appears consistent with national numbers. "NAR looked at inventory in the higher price ranges ($750,000 and above) in May, comparing that month’s supply with a year earlier. In May 2008 the month’s supply was 17.6 months; in May 2009 it was 24.9 months," notes Walter Molony, a NAR spokesman.

One blogger, reporting on activity in the prestigious 90210 ZIP code of Beverly Hills, Calif., said for May there were 110 single-family residences for sale: five homes over $20 million; 14 homes at $10 million to $20 million; 25 homes at $5 million to $10 million; 22 homes at $3 million to $5 million; eight homes at $2 million to $3 million; and two homes under $2 million.

The California Association of Realtors, reporting regionally, charts Santa Barbara South Coast as the state’s priciest market with a May 2009 median sales price of $875,000, which was down 27.5 percent from May 2008.

I called Alyson Spann, president of the Santa Barbara Association of Realtors and a local broker, to see what was going on in her area of the world.

"The high end of the market in Santa Barbara, particularly the areas known as Montecito and Hope Ranch, has been soft for the last two years," she says. "Traditionally, the homes there average $3 million to $4 million with the bottom of that market above $2 million. The bottom of the market is now around $1.5 million."

That $1.5 million residence would be a fix-up, she said.

This issue of inventory is also a problem here as it is in the Hamptons. In Montecito, Spann reports an inventory of 22 months, but in the smaller Hope Ranch the inventory is at 12 months.

How bad have things gotten in Santa Barbara? Spann works a new-home development called The Bluffs on the Santa Barbara coast. Home prices here began at $2 million, rose to $2.7 million, and have since fallen to $1.6 million. The good news is, at those prices, things are beginning to move.

"We had no sales for a year — now we have four houses in escrow," she says.

Within the 90210 ZIP code, the fearless Beverly Hills blogger noted 18 of the 110 homes for sale were in escrow with an accepted offer.

On the East Coast, Brennan is also optimistic, as he says people have come back to the market looking for bargains.

Although this sounds a bit like an oxymoron, apparently there are bottom-fishers even at the top end of the housing market.

Steve Bergsman is a freelance writer in Arizona and author of several books, including "After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade."

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