Luxury Real Estate Market Picks Up
In luxury home markets, bidding wars are back and homes are selling quickly, serving as a stark contrast to everywhere else.
“Luxury is the best performing segment of the housing market right now,” says Stan Humphries, Zillow.com’s chief economist.
Prices of $1 million-plus properties have risen 0.7 percent since February. Meanwhile, prices of homes under $1 million have fallen more than 1.5 percent, according to Zillow.
A rebound in Wall Street has helped fuel a thirst again for mansions in the Hamptons and on Long Island, as well as luxury co-ops in New York City, where closings are returning to 2007 levels. Also, a tech boom is driving sales in the luxury market in Silicon Valley, where twice as many homes have sold for $5 million or more this year than the year prior.
International buyers are a big part of the rebound in the luxury market, housing experts say. Foreign buyers purchased $82 billion worth of U.S. residential real estate last year–an increase from $66 billion in 2009. In Florida, foreign buyers now make up a third of all home purchases, up from 10 percent in 2007.
Source: “Luxury Properties Are Recovering. The Rest of the Housing Market? A Deep and Long Depression,” Associated Press (Sept. 21, 2011)