The months of inventory for Dane County homes priced at or above $800,000 is currently 47.6 months. Last year at this time the inventory level stood at 76.6 months. This is a dramatic drop, but make no mistake the current 4 years of inventory still adds up to a very strong buyer's market.
Why have the months of inventory fallen so much? There are two reasons.
First, active listings are down slightly. Active listings have fallen from 134 on April 30th of 2010 to 123 on April 30th of this year.
The bigger reason is sales have increased. There were 21 sales for the 12 months preceeding April of 2010. There were 31 sales for the 12 months preceeding April of this year.
Here's a historical look at how luxury home sales of $800,000 and above have been trending over the last 11 years. The 32 homes sold in 2010 were well above the 21 from 2009, but still well below the levels from 2005 to 2007.
Taking it up a notch, here's how luxury home sales of $1,000,000 and above have been trending over the last 11 years. As the graph shows, last year was a good year by historical standards. After two very low volume years in 2008 and 2009, some luxury home buyers decided it was time to jump into the market in 2010.
Last year we helped one client sell a $1.3M home, and another buy at the same price point. This year we are helping a buyer purchase a home for over $1M. Based on what we are seeing right now, we expect to see luxury home sales at or near the levels from last year.