Thursday, August 18

Luxury Home Sales Blow Away Expectations, Grow Leaps and Bounds Over Wider Market

A new report from online real estate service Redfin is showing some positive signs of growth in one of America’s smallest, albeit most lucrative, sectors of real estate. Year-over-year, the sales of luxury homes in the U.S. have grown by 35.7%. Since January,luxury home sales have grown by more than 21%. In a country where the rest of the real estate market remains shaky at best, this growth is more than welcome news, both for the overall economy and the real estate agents who are making big things happen.
Luxury Homes Sales Buck Dismal Nationwide Trends
When looked at against new home sales for April, the boom in luxury homes is even more impressive. New home sales in the general market only grew by 6.4% last month, and while that should be seen as encouraging after two months of decline, the fact is that the market isn’t growing fast enough to be labeled as “healthy” or “recovered,” despite what Philadelphia Federal Reserve Bank Chairman Charles I. Plosser and others have to say.
“I think that luxury home sales are doing so well because we’re still offering great prices, interest rates are still historically low,” says Nobel Davis, broker at Sante Fe Exclusives. “We also know that interest rates will rising in the future, so many potential home buyers are looking to purchase now instead of in the future in order to take advantages of low interest rates and low purchase prices. Prices will continue to increase as home inventory decreases.”
Some areas of the country are actually watching their general housing markets contract, while their luxury homes push ahead of even the incredible boost to national luxury sales. Seattle, for example, has seen sales in its luxury market — comprised of homes worth $1.65 million and above — skyrocket by 67.7% since the first of year. Meanwhile, homes for the everyday Seattleite have shown a decline of 4.2% in the same period.

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