Where are the Buyers...for the Luxury Home Market?

By
Real Estate Agent with Cedar Rapids/Iowa City, IA KW Legacy Group S44645

I would like to take a minute to talk about listing luxury properties.  In my market in the Cedar Rapids/Iowa City area, this includes homes that are priced above $500,000.  These sellers expect and deserve the best market exposure possible.  After all, in my market, this is the portion of the market that has the smallest pool of buyers and the longest absorption rate.

Currently, there are 49 listings that are priced at $500,000 or higher out of 2052 listings in the MLS.  Last year, 35 sold with an average days on the market of 159 days.  The current days on the market for the 40 active listings is 150 days....Let that sink in for a minute.  There are currently 49 listings on the market that have already been on the market for 150 days.  This means that if no other properties come on the market, we are already almost past the average days on the market in the last 12 months.  And let's be realistic, this is only January.  There will be more homes on the market by March and very few will be sold by then. 

So creating demand in this market is very difficult to say the least.  The pool of buyers has greatly diminished, even though the interest rates have remained low.  The average buyer that is relocating from California, is selling a home that is in the $700,000+ price range, however they are purchasing a home that is less than $400,000 here in our market.  Why?  They can get so much house for that price!  And there is no need for such extravagant homes for these young families.  The real estate crisis has made buyers more cautious about what they can afford and what they need.

Best of luck to sellers that are in this price point.  It takes a lot of extra effort to reach these select buyers that are shopping for your home. Do your research and ask the right questions as you are interviewing an agent to represent your home.  It is not impossible to sell your home in this market, but it is essential that your home is seen everywhere, marketed to the agents that have the buyers, and very professional photography and marketing!

Keep smiling!

Karen

 

 

Posted by

 

Karen Feltman, REALTOR®, ABR, AHS, CHMS,                                                                      CNE,CRS, e-Pro, green, GRI, SRES, TRC

Keller Williams Legacy Group

4850 Armar Drive SE Ste B

Cedar Rapids, Iowa 52403

Email: karenfeltman@gmail.com

Mobile  319-521-0701

www.KarenFeltman.com

Licensed in the State of Iowa

© 2010-2018 by Karen Feltman, Cedar Rapids/Iowa City Relocation Specialist 

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31 Days of January - New Years Resolution
Tags:
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luxury home market
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Rainmaker
150,469
Virginia Gardner
Roy Wheeler Realty Co. - Charlottesville, VA
Realtor, Charlottesville, Serving Central Virginia

kind of makes me shiver, shades of 2008 all over... sigh

Jan 30, 2011 01:50 PM #1
Rainmaker
481,748
Ricki Eichler McCallum
CastNet Realty - Corpus Christi, TX
Broker,GRI,ABR, e-Pro, TAHS

Hi Karen,  That is a hard market right now.  It is the lower priced homes that are selling in our area as well but at least they are selling.  Hopefully, this year will be much better.

Jan 30, 2011 01:59 PM #2
Rainmaker
293,815
Jay O'Brien
RE/MAX Revolution - Kansas City, MO
Kansas City : Social Media Guy

Makes sense, but often those listings are the ones that are the most overpriced for what the market truly is. They may still "think" it's worth $675K but not want to admit it's taken such a hit... Thx for the post!

Jan 30, 2011 02:14 PM #3
Rainmaker
528,731
Karen Feltman
Cedar Rapids/Iowa City, IA KW Legacy Group - Cedar Rapids, IA
Relocation Specialist in Cedar Rapids, Iowa

@Virginia-We never had much of a high end market in the first place.  It seems that the buyers that are spending this much are choosing to build a custom home instead of purchasing something that is pre-existing.

@Ricki-I think that our market is still seeing a decline in the pricing of these luxury homes, especially as more buyers determine that less is more!

@Jay-That is also true.  I did not really look at the list to sale price ratios on these, but I would guess that you are right!  Thank you for reading!

Jan 31, 2011 01:55 AM #4
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Rainmaker
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Karen Feltman

Relocation Specialist in Cedar Rapids, Iowa
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