Luxury Home Sales still Ascendant as Buyers Shift

Redfin, the large national real estaternfirm based in Seattle, is reporting that, while sales of homes costing over $1rnmillion is still outpacing the rest of the market, the source of these sales isrnchanging.  The company says that thernluxury housing market, which was the first segment to recover after the housingrncrisis, continues strong, driven by a record high stock market, low interestrnrates and by foreign investors.</p

Sales of home costing more than $1 millionrnincreased by 9 percent in the third quarter of 2014 even as all home sales wererndown 1.2 percent when compared to the third quarter of 2013.  However Redfin says that overseas investmentrnin these homes is beginning to flag and those markets which have benefitted thernmost from foreign investors are seeing “a steady and dramatic decline in salesrnof million-dollar-plus homes.”  Thoserncities where there is less reliance on investors, both foreign and domestic,rnare still seeing a steady increase in high-end sales.   </p

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Therndefinition of luxury is, of course, as local as any other facet of realrnestate.  Redfin points out that there arernparts of the country where a million bucks will buy little more than an averagernhome and many California cities fall into that category.  Thus it is not surprising that four of therntop five cities in terms of expensive home sales were in California; SanrnFrancisco, Los Angeles, and San Jose with San Diego at number five.  But other cities that are consideredrnaffordable were among the top ten – Chicago in fourth place and Houston inrnsixth, both beating out Washington, DC (number 7); Seattle (8), and Boston (9) whichrnhave higher housing costs in general. AnotherrnCalifornia city, Newport Beach, rounds out the top ten list.</p

The average increase for the 385rncities that had million-dollar-home sales in the third quarter was 17 percent</bbut in Houston those high-end sales were up 42 percent from the third quarterrnof 2013.  Redfin said this increase was “drivenrnby a shift in homebuyer demand toward luxury properties.”  Redfin agent Tara Waggoner said that Houstonrnbenefits from a strong and diverse job market and that many people are comingrninto the area through job transfers from the coasts.  “Those people are shocked at how much homernthey can get for $1 million in Houston,” she says. </p