Luxury sales get a bounce
One of the things that has always been fascinating to me about real estate is that you never know what may happen next. Sometimes it’s good, sometimes it’s bad and sometimes you just want to get and bed and pull the covers over your head. But according to the Wall Street Journal, there is one area of the real estate market that has bounced back big time.
MDA DataQuick, a real estate data provider did a study for the Wall Street Journal at the end of May regarding the sale of luxury houses. The study found that sales of homes over $2 million in the first quarter of the year were actually on a par with the levels of 2005, the peak year for existing home sales volume nationwide.
After a horrible 2009 this was great news pointing to the luxury market making a comeback. The assumption is this turn around was driven by growing buyer confidence, improved financing conditions and more realistic seller pricing. The study went on to say that nationwide sales of homes selling for $2 million to $5 million in the first quarter totaled 2,461, up 32 percent from a year before. Despite the housing downturn, well priced homes in some of the country’s most sought after neighborhoods are selling fast and frequently with multiple offers.
In the state of Florida, Miami has really shown improvement in the $2 million or more price range. During the first quarter of the year there were 21 sales in this range, up from 15 last year and close to the 23 that sold in that same time frame five years earlier. However, the Miami-Date region still has enough homes priced at $2 million or more to last 41 months at the current sales pace, which is an improvement from the 116 months a year ago.
Armed with this data, I decided to do my own little on line research to see what was happening in Manatee County in the over $1 million sales range. Since the beginning of the year to what was recorded as of this writing, about a four-month period, Manatee County had 23 sales $1 million or over, with the following breakdown: Anna Maria Island five, Longboat Key five, and Palma Sola two.
The remaining 11 sales were in communities in the eastern or southern parts of the county like Lakewood Ranch, Hawks Harbour, Panther Ridge, etc. The sale prices ranged from $1 million to $2,650,000 with three sales over the $2 million mark.
Considering Florida has been one of the hardest hit real estate markets in the country, I was very impressed and encouraged with these numbers. There is, however, one little issue that could turn the luxury market upside down again. Unlike most housing trends that are dependent primarily on employment statistics, the luxury market is primarily dependent on stock market trends.
The Wall Street Journal reports that high- end buyers are much more sensitive to changes in the stock market which for the first quarter was helping them feel wealthier. Recently the stock market has been sliding back below the 10,000 mark on the DOW, and if it doesn’t recover soon it could have an adverse affect on the high-end market.
Well that’s the good news/bad news for this week, although, I think it’s mostly good. So go ahead and peek out from under the covers. You’re probably safe for now.