by Steve Harney on December 29, 2009
Though the upper end market has been weak over the last few years, this may be proof that it is starting to turn. It is something we will continue to keep our eye on.
Yesterday, we reported on the differences between two major housing reports that were released last week. Today, I want to comment on something both reports had in common but has been vastly under-reported: the sudden increase in sales of luxury homes.
The past several months have shown a tremendous uptick in buyer activity. And, though the market has been buoyed by the increase in sales, the major drawback was that it was mostly low-end properties that were selling.
But there is some great news! The mid-tier and upper-tier prices are beginning to show movement!!
U.S. Census Bureau’s most recent ‘New Construction Report’ showed that ‘very expensive homes’ sold better than in previous months. The market share of homes costing more than $750,000 rose 150% last month (to 5% from 2% in October).
And the NAR ‘Existing-Home Sales Report’ showed similar improvement in the high-end market as evidenced by the following table:
This is proof that people are gainning confidence in the values of luxury properties.
However, I think we should look at these increases with cautious optimism (afterall, only 2.3 percent of all homes sold in the Existing Home Report were above $750,000). Yet, we can not dismiss that the numbers are showing positive momentum in the upper price ranges in both categories (existing homes and newly constructed homes) .