Is the Luxury Real Estate Rebounding?

Is the Luxury Real Estate Rebounding?

Despite the reported challenges facing the housing market, there’s news about the luxury segment that seems very promising.

On May 28, The Wall Street Journal released the results of a study conducted by MDA DataQuick, a real estate information provider, stating that in certain parts of the country, sales of homes over $2 million in the first quarter of 2010 were reminiscent of numbers seen in 2005, when existing-home sales volume peaked nationwide.

The WSJ singled out Beverly Hills, San Francisco and Menlo Park in California as well as Manhattan and The Hamptons in New York as having particularly strong rebounds. Even Las Vegas and Miami—markets with significant troubles over the past few years—are experiencing a “strong uptick,” the Journal reported.

What’s driving the trend? Price reductions and low interest rates have likely spurred sales. Plus, many luxury buyers in places like Miami are international buyers, and the exchange rate has been very favorable lately.

The WSJ study is not the only positive news for luxury homeowners. According to the National Association of Realtors, sales of existing single family homes valued at $1 million or more in May (the latest month for which statistics are available) rose 77.3% year-over-year. And the Institute for Luxury Home Marketing reports a “strong reduction” in average days-on-market for active listings of luxury homes.

If you’re a seller--particularly in the markets mentioned above--this is good news. If you’re a buyer, it’s even better. Many parts of the U.S. are still strong buyers’ markets due to increasing inventories and decreasing prices.

It's Your Career - I'm Here To Support YOU!
Constantine Isslamow 



Friends, followers, and connections are the way of the future.
Twitter | Linkedin | ActiveRain | Facebook |

Existing home sales rise in US, but values still down

As inventories continue to decline in the US, existing home sales jumped 10.1 per cent to a seasonally adjusted rate of 6.1 million units in October, from 5.54 million in September, according to the National Association of Real Estate. The figures easily beat predictions earlier from a Thomson Reuters poll of economists predicting home sales would increase just 1.4 per cent.

"The first-time homebuyer tax credit clearly was a motivating factor and an effective market stimulus to reduce inventories and help stabilize prices," says Mike Onorato, president of the Illinois Association of Realtors, which saw a 24.2 per cent increase in October home sales in that state.

Many real estate agents say the $8,000 tax credit for new homebuyer, which was set to expire on Nov. 30, pulled future buyers into the market earlier. If the tax credit had expired, the fear was the market would drop off in the winter and potentially beyond.

Hoping to stave that off, Congress renewed the credit earlier in November and broadened its reach to current homeowners as well. This latest move will expire on April 30, 2010. Current homeowners who have owned their homes for at least five years can now claim a tax credit of up to $6,500 for a home purchase.

Sales activity is at the highest pace since February 2007, when it hit 6.55 million.

"Many buyers have been rushing to beat the deadline for the first-time buyer tax credit that was scheduled to expire at the end of this month, and similarly robust sales may be occurring in November," says Lawrence Yun, NAR chief economist.

He says it is likely such a spike in October would result in a decline in December and early next year, however, before a possible surge in the spring or early summer.

Yun says an encouraging factor is the historically low interest rates, which were at the third lowest level on record dating back to 1971.

Meanwhile, despite the increase in buyers, prices were still down in the US.

The national median existing-home price for all housing types was $173,100 in October, down 7.1 per cent from October 2008. That could largely be due to distressed properties, which accounted for 30 per cent of sales in October.

It's Your Career - I'm Here To Support YOU!

Constantine Isslamow

Real Estate Broker/Mortgage Broker/Manager

Century 21 United Realty Inc. Brokerage/CENTUM Core Financial Inc.

Independently Owned and Operated

Blog / Website / Follow Me / LinkedIn

CENTUM Core Financial Inc. Brokerage License #: 10642 Constantine Isslamow License#: M08005391

Source: Mortgagebrokernews.ca