Luxury Home Market Coming to Life
Nationwide, the one segment that has shown signs of strength in 2011 is the luxury home market. Even though some of the other price ranges are challenged by issues such as buyer mortgage qualification and lack of employment opportunities, the higher end market has to a great extent avoided those issues.
"Luxury is the best performing segment of the housing market right now," says Stan Humphries, chief economist of Zillow.
Prices of $1 million-plus properties have risen 0.7 percent since February, nationwide, according to Zillow.
A rebound in Wall Street has helped fuel a thirst again for mansions in the Hamptons and on Long Island, as well as luxury co-ops in New York City, where closings are returning to 2007 levels. Also, a tech boom is driving sales in the luxury market in Silicon Valley, where twice as many homes have sold for $5 million or more this year than the year prior.
International buyers are a big part of the rebound in the luxury market, housing experts say. Foreign buyers purchased $82 billion worth of U.S. residential real estate last year--an increase from $66 billion in 2009. In Florida, foreign buyers now make up a third of all home purchases, up from 10 percent in 2007.
Southwest Florida is further into the recovery than some other parts of the country, with good activity in all price ranges and most geographic areas. The luxury market has, like other areas of the country, been quite active. According to Phil Wood, CEO of John R. Wood Realtors, "We were particularly impressed with the strength of the high end local markets during the normally slow summer and early fall seasons."
The Wood firm is heavily involved in the million and over market, having sold thousands of homes in that price range. Global marketing programs and the hundreds of web sites run by the company have been especially effective in helping reach potential upper end buyers. Current area listings in that price category range from one million to approximately $28 million.
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Garren Grup is a Real Estate Consultant, REALTOR®, ABR, GRI, CDPE, SFR, CREN. Noteworthy Results in Luxury properties, Golf course homes, beachfront and vacation foreclosures!