by The KCM Crew on October 8, 2010 ·
The news about the housing market still seems to be dominated by stories of pending disaster. Headlines report that some believe that there is a 25% chance of a ‘double-dip’ in home prices. We can understand the concern. The last Existing Home Sales Report by the National Association of Realtors (NAR) showed that sales were down 19% from the same time last year. Obviously, the real estate market is still struggling.
However, there is a segment of the housing market that is rapidly gaining momentum –LUXURY REAL ESTATE! Just last week we reported that NAR’s 2nd Quarter Report on Home Sales Statistics showed a 6.1% increase in sales of homes over a million dollars.
The latest home sales report mentioned above (covering August closings) shows an 11.5% increase in sales over that million dollar mark! (It also showed a 4.6% increase in sales of homes between $750,000 and $1 million). Though overall sales fell almost 20%, sales of upper end properties are escalating.
That Also Includes the ‘Super Luxury’ Market
The ‘super luxury’ market is defined by different prices in different markets. Any market however would consider homes over $4 million in this category. The Wall Street Journal last week reported on the Manhattan real estate market:
A report by Brown Harris Stevens and Halstead found that the number of co-op sales selling for more than $7 million in Manhattan doubled in the third quarter over a year earlier.
The Luxury Portfolio Fine Property Collection is the luxury face of Leading Real Estate Companies of the World the largest global network of premier locally branded companies dominated by many of the world’s most powerful independent luxury brokerages. On their website, they reported 20 sales of homes with a final listing price of over $ 4 million dollars in the last two months, covering eight different states!
Proper pricing is essential.
The more affluent buyer is beginning to see opportunity in this real estate market. Make no mistake however. Whatever the price point, the luxury buyer must see value.
Hall F. Willkie, president of Brown Harris Steven, says that more affluent buyers “in the higher price point” were driving up the average price. “You are definitely seeing people feeling confident as long as they were getting good values,” he said…Pamela Liebman, president of Corcoran Group, said that there was a lot of strength in the market…”People are willing to spend large amounts of money for real estate because they feel they are getting more for their money,” she said.
The wealthiest families in the country are re-entering the real estate market. That should tell everyone that the market is beginning its turn for the better.