Top tier properties are getting close to ending their multi-year buyers’ market and quickly reaching a more equal balance between buyers and sellers, catching up with less expensive homes .
Since early December, the Institute for Luxury Home Marketing’s Market Action Index has risen 30 percent and is now only seven points away from reaching a seller’s market on a national level. The index, which is managed by Altos Research, measures available supply relative to the current level of demand.
“The ILHM national market is currently in the buyer’s market zone though not strongly so. The Market Action Index stands this week at 23 so luxury buyers should expect to find reasonable levels of selection,” the report noted. On December 2, the index stood at 16.
The ILHM National Luxury Composite Price has risen 2 percent since December 30, from $1,196,838 to $1,221,962, despite the slow winter season. Despite the fact that the number of new listings has increased 51 percent over the past six weeks, the average days on market at 204 has declined slightly, from 209 to 204. Luxury homes typically take longer to sell than less expensive ones and the ILHM average days on market (204) are much higher than Realtor.com’s January median of 119 days for all price ranges. The percent of properties with a price decrease, another sign of buyer dominance, has also decreased over the past six weeks, from 26 percent to 24 percent of all luxury properties.
The index is rising in nearly every one of the 31 markets tracked by the institute. The ten hottest luxury markets are Washington DC where the average days on market is 123; San Francisco DOM 140, Las Vegas DOM 142, Silicon Valley DOM 157, San Diego DOM 161, Austin DOM 174, Seattle DOM 176, Houston DOM 178, Atlanta DOM 183, and Phoenix DOM 191.
Brokers and agents around the country report accelerated sales around the country. “After a substantial slump in 2008-2010, migration to Florida is accelerating again and is expected to generate new jobs and boost the continuing recovery. Buyers of lavish mansions and luxury homes for sale led the wave of those heading into Florida at the beginning of 2013. In Sarasota County in December 2012, 47 homes and condominiums sold for over $1,000,000, a figure higher than any other 2012 month,” reported William True of Sarasota Real Estate.
However, sales of luxury homes in the Denver metro area over $1 million started the year off with 32 properties sold in January, which is a decrease from 45 sales for the month of December. The days on market increased from 179 to 216 days, according to
First Republic Bank reported today that San Francisco Bay Area luxury home values rose 8.4 percent from the fourth quarter of 2011. The average luxury home in San Francisco is $2.73 million. Los Angeles area values rose 4.4 percent from the fourth quarter a year ago. The average luxury home in Los Angeles is $2.06 million. San Diego area values decreased 1.4 percent year-over-year. The average luxury home in San Diego is $1.64 million.
“Luxury home prices rose strongly in the San Francisco Bay Area and Los Angeles this past year,” said Katherine August de Wilde, President and Chief Operating Officer of First Republic Bank. “Growing demand from buyers, low mortgage rates and a lack of inventory continued to put upward pressure on values. Multiple offers are common in many high-end neighborhoods as buyers compete for a small number of attractive properties.”
Some 18 Nashville million dollar homes sold in January, an increase of 20 percent over the 15 sales last January. Even more encouraging is the 31 pending sales of Nashville Million dollar listings. The average sales price of homes listed for more than a million dollars was $1,531,490 and the average days on market for sold homes is down to 124 days, according to Larry Brewer of Benchmark Realty.
“In Scottsdale there was a big jump in January for the number of homes on the market in this price point. There were 173 at the end of the year and 213 at the end of January. However, January home sales were low, at 15. This was to be expected coming off such a low pending number in December. Now that pending sales have increased, we expect this number to come up in February,” report Joyce Tawes and Heather Tawes Nelson with Realty ONE Group.
In Connecticut, he luxury market, those properties valued at $2 million and up, saw a 3.0 percent increase in single family home sales and the median price for those homes rose 9.0 percent in 2012. Luxury condominiums sold 15.4 percent fewer units than last year and lost 7.4 percent in value. Most of the single family activity took place in Fairfield County and half of it in Greenwich, Darien, New Canaan and Westport. In Westport, 70 homes sold for over $2 million, up 32.1 percent. There were also some significant sales this year in Hartford, Litchfield and Middlesex Counties, including a sale in Essex for $6 million and in Old Saybrook for $5.3 million. Newly constructed luxury homes are starting to come back into focus in some markets, adding new interest and creative architecture to the scene. This year’s Home Builder Awards featured a number of exciting new design ideas in luxury homes all across Connecticut, reports Candace Adams, President/CEO, Prudential Connecticut Realty.