Even in one of the hottest real estate markets in the United States people are starting to feel the pinch of the foreclosure crisis. The AP has a story on the falling housing prices
in one of the most beautiful and pricey areas in the country. In January, home sales fell more than 55 percent from the year before. The number of houses at any stage of foreclosure jumped by 152.9 percent. So far the very expensive wine towns of Calistoga, Yountville, St. Helena and Rutherford are still doing well but the city of Napa and the town of American Canyon have been hard hit, finding that the newer housing developments are particularly vulnerable both to lack of sales and forecloures.
Part of the worry for Napa is that its exponential growth has been fueled by wine tourism which may start to wane in the current economic climate. Currently condos, offices and retail stores are under construction, designed to appeal to the tourists and part-time residents. While the general wisdom seems to be that recessions do not cause people to stop drinking wine, it may cause them to cut back on winery tours which would impact other luxury retail businesses which have come to the area in the past couple of years.