It’s still a buyer’s market for properties selling for more than half a million. Tight inventories driven by negative equity and slow foreclosure processing and rising prices are having much less impact on luxury homes than on less expensive homes.
According to the Institute for Luxury Home Marketing’s weekly market report, the average days on market were 186 for luxury homes. Inventories for the luxury segment are about the same as they were in November. Median prices in the 31 markets that ILHM tracks have stayed fairly stable. Days on market range from a low of 111 days in Silicon Valley to 268 in New York.
By contrast, the national median age of all homes in the June REALTOR.com® inventory dropped to 84 days in June, down -9.67 percent on an annual basis. The size of REALTOR.com’s ® inventory of homes for sale was 19.35 percent below a year ago. Prices are up 2.68 percent on a year-over-year basis, according to the Realtor.com Trend Data released today. List prices increased in 101 markets of the 146 markets covered by REALTOR.com®, held steady in 26 markets, and declined in just 19 markets.
Several factors are causing the inventory drawn down among lower price properties. Negative equity is keeping many potential sellers out of the market, which keeps a lid on inventory and complied with the reduced flow of REO properties has led to much tighter market conditions for lower priced properties, particularly in the hardest hit markets, according to CoreLogic Economist Sam Khater. Khater estimates that lower tier properties are appreciating three times faster than expensive homes as a result of tighter inventories.
Luxury brokers around the nation report little change in their markets in recent months, unlike the tight inventories and rising prices among entry-level homes found in almost market in the country.
For more information, visit www.realestateeconomywatch.com.