Luxury Home Sales still Ascendant as Buyers Shift
Redfin, the large national real estate firm based in Seattle, is reporting that, while sales of homes costing over $1 million is still outpacing the rest of the market, the source of these sales is changing. The company says that the luxury housing market, which was the first segment to recover after the housing crisis, continues strong, driven by a record high stock market, low interest rates and by foreign investors.
Sales of home costing more than $1 million increased by 9 percent in the third quarter of 2014 even as all home sales were down 1.2 percent when compared to the third quarter of 2013. However Redfin says that overseas investment in these homes is beginning to flag and those markets which have benefitted the most from foreign investors are seeing “a steady and dramatic decline in sales of million-dollar-plus homes.” Those cities where there is less reliance on investors, both foreign and domestic, are still seeing a steady increase in high-end sales.
The definition of luxury is, of course, as local as any other facet of real estate. Redfin points out that there are parts of the country where a million bucks will buy little more than an average home and many California cities fall into that category. Thus it is not surprising that four of the top five cities in terms of expensive home sales were in California; San Francisco, Los Angeles, and San Jose with San Diego at number five. But other cities that are considered affordable were among the top ten – Chicago in fourth place and Houston in sixth, both beating out Washington, DC (number 7); Seattle (8), and Boston (9) which have higher housing costs in general. Another California city, Newport Beach, rounds out the top ten list.