After Steady Declines in 2019, Luxury Home Prices are Stabilizing in Some U.S. Markets

November 25, 2019 by

luxury home pricesLuxury Home Price Report

According to Redfin, the average sale price for luxury homes in the U.S. rose 0.3 percent year-over-year to $1.6 million in the third quarter of 2019. Even though that’s essentially flat, it marks the first time luxury prices did not drop after three straight quarters of decline.

For this analysis, Redfin tracked home sales in more than 1,000 cities across the U.S. (not including New York City) and defines a home as luxury if it’s among the 5 percent most expensive homes sold in the quarter. In the other 95 percent of the market, home prices increased 3.6 percent annually to an average of $319,000 in the third quarter.

Sales of homes priced at or above $1.5 million rose 3.2 percent in the third quarter. The increase comes after three straight quarters of dipping sales in the luxury sector, including a 12 percent annual drop in the first quarter of 2019. Sales of homes priced below $1.5 million experienced a similar annual increase, with a 2.9 percent rise.

Supply of homes priced at or above $1.5 million rose 9.3 percent year-over-year in the third quarter, the sixth consecutive quarter of growth, albeit the smallest annual increase in a year.

The big increase in luxury supply was largely driven by a boost in the number of high-priced homes hitting the market. New listings priced at or above $1.5 million rose 6 percent year over year in the third quarter, while new listings of homes priced below $1.5 million dropped 4 percent.

“Because recession fears peaked over the summer, I expected luxury home prices and sales to dip. But it appears that nerves alone weren’t enough to scare off wealthy homebuyers,” said Redfin chief economist Daryl Fairweather. “The U.S. economy grew faster than expected in the third quarter, partly as a result of healthy consumer spending. Those results, along with flat luxury home prices and rising sales, go to show that Americans are basing their spending habits on their own personal financial situation rather than concerns about global economic tensions. For many, that means strong incomes and good employment prospects.”

Luxury U.S. housing market summary

Biggest luxury price gains

Luxury prices increased in more than two-thirds of the markets tracked by Redfin. West Palm Beach tops the list, with a 128.3 percent year-over-year increase to an average price of more than $3.7 million. It’s followed by two other cities in Florida: Clearwater (up 49.3% to $1.6 million) and Delray Beach (up 47.3% to $2.6 million).

West Palm Beach Redfin agent Elena Glatko said one driving force in the particularly large year-over-year price increase in West Palm Beach in the third quarter was dozens of sales in a new luxury condo building. Sale prices for individual units spanned from roughly $4 million to more than $12 million. Glatko also noted a few other factors that contribute to the area’s strong luxury market.

“Homebuyers can get a lot more for their money in West Palm Beach than in more expensive places like Miami and Palm Beach Island,” Glatko said. “And I’ve noticed that both luxury buyers and sellers feel that real estate is one of the assets least susceptible to economic changes. They believe that over time, luxury real estate is a better investment than the stock market.”

Biggest luxury price declines

Luxury home prices in Charleston, South Carolina declined 17.6 percent to an average of $1.6 million in the third quarter, a bigger drop than any other city. Next come Virginia Beach (down 7.6% to $1 million) and Reno (down 6.9% to about $1.5 million).

Luxury prices also declined in San Diego (down 4% to about $2.6 million), Miami (down 3.8% to about $2 million), San Jose (down 3.2% to about $2.3 million) and Scottsdale (down 1.5% to about $2 million).

“There’s been less activity in the luxury market in Miami over the last few years, and now it’s definitely shifting toward buyer’s favor,” said local Redfin agent Jessica Johnson. “Sellers in the area can’t get away with overpricing their home because buyers are less willing to overpay when they know luxury prices aren’t increasing in Miami–if they can’t get a good deal on one particular luxury home, they can probably go down the street or to another neighborhood and find a seller who is willing to negotiate with them.”

 

World Property Journal November, 2019

Filed Under: Downtown Sarasota Condos, Downtown Sarasota Real Estate, Sarasota Luxury Real Estate Tagged With: , ,

Sarasota Luxury Market at the Top in the Nation

August 20, 2018 by

Sarasota Luxury MarketSouthwest Florida — the Sarasota metro area in particular — has a reputation for its wealth of gold-plated residences. The latest Luxury Home Index from realtor.com validates that celebrity status, or, from another viewpoint, notoriety.

In the site’s May report of the top 10 fastest-growing U.S. luxury markets nationwide, the Sarasota-Manatee market stood atop the list. Collier County, near Naples, came in third in the rankings of the percentage increase of the top 5 percent of the most expensive home-sales prices.

The overall transaction total doesn’t matter. Sarasota’s entry-level luxury price rose 19.1 percent year over year, reaching $993,000,

Whether that sales price merits the luxury label is debatable. By many measures, a home’s sales price must reach at least $1 million before entering the so-called luxury market. But who’s quibbling over Sarasota falling $7,000 short?

Roger Pettingell, a luxury waterfront specialist with Coldwell Banker Residential Real Estate, cites two price points for opulent status.

“Coldwell Banker’s starting price for what we consider a Global Luxury listing is $1.2 million,” he said this week. “More anecdotally, I consider a luxury Sarasota property to be one which is priced over $3 million.”

Let’s stick with that higher figure, since many a million-dollar home on the water ranks as a tear-down. Plus, there are a lot of $3 million homes on the market, 129 to be exact. The top dog comes with a whopping $19.5 million price tag. That’s 19,300 square feet at $3,884.57 for one square.

Of the 79 that recently sold, the highest sale reached $9 million for 9,202 square feet, and that’s with an $800,000 cut-off list. That’s also thousands more per square foot — $6,448.41.

The average and median list price of all those $3 mil-plus homes stand at more than $5 million. The median closing, though, was $3.6 million.

Luxury homes, luxury prices, indeed.

The lowest on the market and sold went for exactly $3 million each, a veritable bargain at a mere $428.41 per square foot.

Michael Saunders & Co. currently has 45 active listings in the $3 million-plus range. Last month countywide, sales of seven homes in that price category were closed, a 75 percent increase over the four in May 2017, said Samantha Emelock, a Saunders communications specialist.

Saunders recently closed on two big sales in Sarasota, at $7 million and $5.4 million.

Collier’s $1.65 million sales mark is only surpassed by three California counties, but the percentage increase for all three Silicon Valley counties did not beat Collier’s.

Prospective home buyers from northern states are propelling the two Florida markets, realtor.com reported, not residents trying to escape the super-heated West Coast.

“Luxury prices in the Sunshine State are rising quickly as buyers from places like New York, Boston and Chicago get wind that there is a better bang for their buck available down South,” Javier Vivas, director of economic research for realtor.com, said in a news release. “Meanwhile, we’re seeing signs of a luxury-market glut in many established markets, which is in some cases leading to spillover demand for their less-pricey neighbors.”

No warning signs here.

“Is there a glut of luxury properties for sale?” asked Longboat Key-based Pettingell? “If you say a luxury property is any property over $3 million, there is less than a two-year supply of properties of $3 million.

“There is certainly not a glut of those premium, market-priced properties, which tend to sell much more quickly,” Pettingell said.

From Jan. 1, 2018, to date, Coldwell Banker in Sarasota has sold or held a contract on 25 properties over $3 million and Pettingell sold seven, said Laitin Schwerin, a senior public relations specialist in a Sarasota Coldwell Banker office. During that same time span in 2017, the company sold 20 properties in that price range, and Pettingell sold six.

Apparently, if you list a luxury home, someone will come to buy.

Sarasota Herald-Tribune June 22, 2018

Filed Under: Downtown Sarasota Condos, Downtown Sarasota Real Estate, Sarasota Luxury Real Estate Tagged With: , , ,

Sales of $4 Million-Plus Homes Surging in Sarasota-Manatee

April 18, 2018 by

Sales of big homes for big bucks continue to be brisk in the Sarasota-Manatee real estate market. Latest sales trends show buyers’ search for value, waterfront and newer homes in current market.

Over the past six months, 28 homes and condominiums in the two counties sold for more than $4 million. Over the same six months in 2016-2017, only 10 properties were sold at that high price point.

 “These are impressive numbers,” Roger Pettingell of Coldwell Banker Real Estate said. He specializes in luxury waterfront properties in Sarasota and Longboat Key. Luxury homes are “moving really good,” he said. “It’s exciting, actually.”

 Others echo those views, citing the Sarasota-Manatee market’s value and attractiveness.

“It’s a really positive trend,” said Joel Schemmel of Premier Sotheby’s International Realty. “Hopefully, the market will continue to accelerate.”

 “These are starting to make us look like a real luxury market,” Pettingell said. And the market is still not overpriced, he said, unlike Naples and Palm Beach.

Brian Loebker, a Realtor with Michael Saunders & Co., called the high-end buyer interest “extremely strong right now.”

Amenities and Value

 “Our customers cite Sarasota as a location filled with amenities and value — you would pay double, or maybe triple, for the same home in other locations like Miami or Naples,” Loebker said. “The Sarasota luxury real estate market is commanding the highest level of interest and attraction in its history at this moment.”

Schemmel calls Sarasota a “destination market.”

Buyers continue to be discriminating in the properties they view, Loebker said. “There is zero tolerance for over-paying or even viewing properties which seem over-priced. The buyers are active, paying with cash, and willing to strike a deal immediately provided it is fair and just for both buyer and seller,” he said. “Any signs of greed or over-self-confidence, and the buyers will never view the property.”

The sheer number of $4 million-plus homes currently awaiting buyers may appear to be just as mind-boggling as the sales figures.

As of April 13, 103 homes were listed for $4 million or more in Sarasota and 19 in Manatee, including single-family homes, condos and townhomes, figures from My Florida Regional MLS indicate.

“The amount of inventory currently on the market over $4 million is not unusual,” Loebker said. “Actually, the overall inventory has been down from October through February, so to see about 100 luxury homes over $4 million on the market right now is on trend with previous years. The key is getting these homes priced right for the buyer pool.”

At the end of April 2017, big listings totaled 79 in Sarasota and nine in Manatee. Listings for April 2016 stood at 70 and 12 respectively, Trendgraphix shows.

Pending sales through the end of this April will likely drop the number of listings, said Jennifer Horvat, chief marketing officer at Michael Saunders & Co.

On water but not on grade

The Realtors pointed out two other trends in the luxury market. The cost of waterfront land “has risen substantially,” Pettingell said, but buyers are less interested in older homes at grade level on water. Properties listed for $1 million to $2 million that are not on the water are the slowest to move, Schemmel said.

A lot of the luxury buyers live in Sarasota but are upgrading their homes while older residents who want to live closer to relatives and community amenities are selling and moving off the islands, thus increasing the luxury-market inventory.

Schemmel added another element to the high-end sales surge: value as an investment. “For the first time in a long time, real estate in the portfolio is a good thing,” he said, and “a great hedge against inflation.”

That is somewhat apparent in one segment of the luxury market. “Sarasota has proven itself as an exceptional location to have a second, third or fourth home,” Loebker said.

Luxury homebuilder Ryan Perrone, president of Nautilus Homes, which specializes in projects that start at about $4 million, agreed that the local market is strong. “We have seen an uptick in interest in our product. It is hard for me to say whether that is just due to a gain in market share or whether it is a trend.”

A wider pool of buyers

The interest is coming from different parts of the country, too, broadening the pool of house shoppers.

“We have taken notice that while our city has been traditionally made up of Midwest transplants, there is a shift of people coming from California and the Northeast,” Perrone said. “I believe that this is because people from these markets are used to looking at those sorts of price points. In fact, those prices look like a deal when coming from L.A.”

Steve Murray, president of Murray Homes, is also seeing an increase in clients from California. Murray Homes is building six homes in the $4 million-plus price bracket, an increase over last year.

“We believe that this is in part due to the state income tax in those states, as well as the new tax regulations,” Murray said in an email. “In addition, our area is seeing an increase in nationwide appeal due to awards, marketing and high-end hotels bringing new visitors to our region.”

Murray echoed the view that Sarasota-Manatee homes represent value. “These clients are used to higher residential prices and so we are seen as a relative bargain when compared with Naples, Miami and their home towns.”

Sarasota Herald-Tribune, April 17, 2018

Filed Under: Downtown Sarasota Real Estate, Sarasota Buyers, Sarasota New Construction, Sarasota Real Estate Market News Tagged With: , , ,