The real estate market is starting to bounce back in select locations throughout the United States. But the luxury housing market is downright smoking in several areas.
Barring a drastic stock market correction, which is less likely given investors positive reaction to the Federal Reserve’s reduction in bond purchases in December of 2013, the trend means the upcoming spring home buying season could be a good one, especially for REALTORS® and upscale home sellers who are fortunate to have their high-end properties listed for sale.
House sales throughout the United States increased by more than 25% in October of 2013 compared to the same time a year prior, according to the latest figures released by the Commerce Department. This was good news especially after a disappointing September that might have reflected unease over slightly rising interest rates and home settlements taking longer than expected.
Things seem to be positively different in the luxury home market.
The National Association of REALTORS® recently announced that sales of properties worth more than $1,000,000 has increased by almost 30% in October of 2013 nationwide compared to October of 2012. September 2013 sales of the same properties increased by a whopping 40%. Now that is smoking!
Being aware that luxury home sales are doing well is just the first step in taking advantage of the trend, of course. You also have to know why they are doing well, which means understanding why the wealthy have been getting wealthier in recent years.
For most of America, the economic recovery has been slow and steady. For the 1 percent, the recovery has already occurred. Now they’re shopping for homes.
1st, the stock market is going gangbusters. While bears predict a leveling out, stocks still have plenty of room to the upside. Knowing a client’s relationship with the stock market (if they are investors) is always useful. Just keep in mind that most surveys state that 75% of the wealthy believe investing in a home is actually more a sound investment than the stock market. Now that is a telling factor.
2nd, wealthy foreign home buyers are on the march, especially in cities in the South and West, where South American and Asian tycoons are investing in real estate. International buyers represented 23% of all home sales in the state of Florida during 2013. Many foreigners do not have the issues of dealing with the mortgage market here in the states because the majority pay cash.
3rd, builders are swarming into the luxury housing market after years of sitting on the sidelines, making sure the wealthy have more home buying options. The new builds won’t depress prices anytime soon, however, according to large home builders, it is because housing inventories remain low. Getting in on new upscale, luxury home builds could be a path to quicker success. You deliver goods where the market is hot, supply is down and demand is up.
The upswing in the luxury housing market has led to some ridiculous home pricing: like celebrities in Los Angeles leaving behind their personal items in their homes for sale as an incentive to affluent buyers looking to own not only a gorgeous house but a piece of fame. This is known as intrinsic selling. Some of the value is simply in the desire to own something no one else has.
Most of us REALTORS® are not in a position to show prospective luxury home buyers Elton John’s former snake-skin-covered bed frame or Ellen DeGeneres’ pots and pans. But you can feel like a star in your real estate market if you can turn over some of the highest value properties in your area.
In Berks County and Reading, PA the upscale luxury housing market is a very small niche but does exist none the same. I am always surprised when I get a call to preview a grand estate home that I never knew existed in our area and I have lived here 51 years.
I have always stated that while Berks County is not on the beaten path, which makes it harder to find these gems, it is also what makes it such a pleasant place to reside. With today’s technology and good intuition it is important to make sure the luxury homes for sale in Berks County and Reading, PA are on the information super highway.
My specialty is accurate home and property information, great home photos and a marketing plan that reaches all of the United States and beyond. There is no reason we should miss the luxury home party. I am certain that with my marketing skills and those of my team at Weichert Realtors Neighborhood One, our customers will not!