For the most part, the housing market has been floundering due to high interest rates and low supply. In contrast, the real estate luxury market is growing despite record-high costs! This article examines the numbers, why it’s happening, and its possible impact in the future…
High-End Properties Cost More than EVER
One could argue that this is the worst time to buy a home to date.
Mortgage rates are high — currently, about 7.06%…
Also, the inventory of properties for sale is low.
For those reasons, it creates a situation where homes become more expensive. Luxury real estate is no exception to this phenomenon.
An asset is classified as “luxury” when its price is in the top 5% of its metropolitan area’s value.
AND LAST QUARTER, THE AVERAGE PRICE OF LUXURY HOMES REACHED AN AVERAGE COST OF $1,225,000 — AN ALL-TIME HIGH!
Via CNBC
However, the sales volume in this property class is rising, and here’s why…
Factors Behind Sudden Upswing in the Real Estate Luxury Market
The main distinction between the declining overall housing market and high-end is the inventory and demand.
CNBC posted this video with some of the latest stats.
In short, affluent buyers can purchase luxury real estate more easily because they don’t get mortgages. They buy these assets with cash.
Further, these home buyers are not worried about paying higher prices at the moment for another reason…
Real estate agent for Redfin, David Palmer, made this remark.
“PEOPLE WITH THE MEANS TO BUY HIGH-END HOMES ARE JUMPING IN NOW BECAUSE THEY FEEL CONFIDENT PRICES WILL CONTINUE TO RISE.”
It seems like the intention with this luxury real estate strategy is to buy high and sell higher.
The question is, will there be people able to afford to buy them at those prices?
Be Great,
GCTV Staff
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