We're seeing a lot of momentum in the luxury home market of late, with prices on the rise and many areas where the market had struggled rapidly transforming into seller's markets, says the Institute for Luxury Home Marketing.
photo credit: Dru Bloomfield - At Home in Scottsdale via photopin cc
Speaking to the Chicago Tribune, institute founder Laurie Moore-Moore explained that prices have been trending upwards since the beginning of the year:
"Inventory has been tight, though we're starting to see a little growth in inventory again. It's not stock-market driven, not necessarily. When you look back at the housing-market downturn, the low point probably was in 2007. Typically, a downturn would be driven by high mortgage-interest rates, but this time it was the whole real estate market that crashed. And at that time, the number of wealthy people in America actually declined, and the number of wealthy households is an extremely important driver of demand"
However, even as early as 2010, wealthier households had already turned the corner, recovering faster than any other sector, insists Moore-Moore:
"This group focused on residential real estate as a pretty desirable asset — for them, a second or third home turned out to be a portfolio play. Driving the recovery, we've had record low interest rates and a perception of bargain prices and then we've had this very affluent group saying, maybe real estate is a smart buy."
According to Moore-Moore, the best markets for luxury real estate at the moment can be fond in Baltimore, Charlotte, New York City, San Francisco and Washington DC, citing data from Altos Research. The data takes into account the 31 ZIP codes in the US with the highest median prices.
However, Altos Research notes that not all high-end housing markets are doing so well. For example, in cities like Atlanta, Dallas, Denver, Las Vegas, Los Angeles and Miami, luxury home markets are stable at best. Meanwhile, Chicago, Orlando and Seattle's luxury real estate sectors have all seen prices fall in recent months.