Gloomy news that July sales of existing homes dropped 25.5% year-over-year has overshadowed new statistics showing summer sales of million dollar plus homes significantly outperformed other price ranges.
“Luxury home buyers have been buying this summer,” said Patty Da Silva, Broker – Owner REALTOR® of Green Realty and member of The Institute for Luxury Home Marketing . “After waiting in the wings, many affluent buyers spent the summer shopping for value and snapping up trophy properties.”
Statistics would indicate that he’s right. According to The National Association of Realtors (NAR), for 2009 million-dollar and above home sales were just 1.2% of total sales or about 61,500 sales nationally. In July 2010, million dollar plus market share was up to 1.9%. While sales of homes in the $500,000 and above range rose dramatically in June, the million-dollar-plus market segment was the only price range in July showing positive growth compared to last year. “The mix of what is selling has shifted in favor of homes priced at $750,000 and above,” said Christopher Green, CDPE, REALTOR® and Manager of Green Realty.
NAR’s report that July’s median sales price increased 0.7% year-over-year may be more a function of increasing sales of expensive properties relative to other price ranges than an indicator of across-the-board home price appreciation.
According to the Institute for Luxury Home Market (ILHM) National Luxury Market Report — which does a weekly analysis of luxury homes for sale in more than 30 major markets — after a dramatic rise in upper-tier inventory, which started in January of this year, the numbers of luxury homes for sale has declined about 5% since the beginning of July. Along with a decrease in inventory, there has been a decline in asking prices. Forty three percent of luxury homes currently on the market have had at least one reduction in asking price over the last 90 days. An additional 19% have been pulled off the market and subsequently relisted.
“While I wouldn’t say the luxury market is in recovery,” said Da Silva, “the growing market share of luxury sales relative to total sales, a slight downward trend in inventory, and sellers who are more realistic about price are factors shifting the affluent into a buying mode.”