As I've been reporting for the past year, sales of waterfront and luxury real estate in the Greater Seattle market have been fairly strong in the past year, as compared to the general market. Coming off a dismal 2009 of luxury real estate sales, we saw huge gains in total sales all over the Puget Sound region. Prices have certainly been down in the highest segments of the market, but much of that is a layover from unrealistic listing prices in 2008 and 2009. Sellers have adjusted their pricing to today's market and prospective waterfront/luxury home buyers have responded in droves.
It seems that much of the same has happened across the country, according to a CNN Money report. Their analysis is that when the stock market makes gains, wealthier buyers will spend money on real estate, even in a bad economy. I'd say that's a bit simplistic, but it certainly does have an effect.
More likely, though, these are folks who considered buying a high-end home three to four years ago. They've been sitting on the sidelines with all of the bad economic and real estate news for a long time, and someone has to call the bottom. Prices on some waterfront homes have gotten lower than we've seen since 2005, and buyers are betting the bottom is in sight.
CNN Money report:
The rich have returned to the real estate market and are taking advantage of big bargains in luxury homes. Sales of million-dollar homes and condos increased last year in all 20 major metro areas - with some cities seeing an 18.6 percent increase in high-end home sales, according to DataQuick Information Systems. The increase follows four consecutive years of declines in million-dollar homes.
The market that fared the best in high-dollar real estate: San Jose, Calif., which boasted a 27.4 percent increase in sales last year in million-dollar homes. Honolulu also saw a big spike in million-dollar sales - a 26 percent increase - as well as New York, where million-dollar home sales rose nearly 25 percent.
In Washington, D.C., million-dollar home sales grew by 20 percent, as government workers continued to help the high-end real estate market there. Washington, D.C., has recently been ranked as one of the highest paid cities, as well as best educated place in the country.
Other cities with big gains in million-dollar home sales include San Diego (14 percent) and Nashville (13 percent).
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