Luxury home markets are bouncing back, with bidding wars heating up and properties being sold off at increasingly rapid speeds, bucking the trend set by other real estate markets, says a report in the Washington Post.
Properties valued at $1 million-plus have seen price increases of 0.7% since the end of February, compared to a 1.5% decrease in the value of homes under $1 million, according to the latest available statistics from Zillow.com.
“Luxury real estate is the housing market’s star performer right now,” said Zillow’s chief economist Stan Humphries.
In normal times, these two market segments usually move in the same direction, but now they are doing precisely the opposite. One reason is that a Wall Street rebound has helped fuel a desire for luxury homes on Long Island and in Hamptons, says the Washington Post, which has seen closings return to something close to the level they were at in 2007.
Also doing well is the luxury market segment in California’s Silicon Valley, which has seen double the number of home sales on $5 million-plus properties this year as compared to the last, on the back of a tech boom.
Experts add that international buyers are also playing a big part in the luxury housing market’s come back. Florida is a prime example of the foreign invasion of U.S. real estate, where almost a third of buyers are non-U.S. citizens. Throughout the U.S. as a whole meanwhile, foreign buyers have snapped up almost $82 billion worth of real estate in 2010, compared to just $66 billion the year before.