The wealthy may soon be feeling the pinch as the luxury housing market takes a hit. According to RealtyTrac, homes listed for over $1 million have dropped 20 percent in 2012. That means the average sales price for expensive real estate homes has gone from $2.5 million, last year, to just above $2 million. Some higher-priced luxury homes are even lopping off several millions of dollars in hopes of finding buyers.
Interestingly, after many years of waiting and hoping, the more vast real estate market is experiencing some price stabilization and possibly even seeing prices rise a bit. Some say that's because sellers are getting comfortable with the lower sales price.
However, other experts argue that the increase is more likely seasonal rather than a true sign that the market has completely bottomed out. Part of the reason for the skepticism, industry economic experts say, is because there is a large looming mass of homes either nearing a foreclosure or already in progress. As those foreclosed homes quickly and massively come into the marketplace, it's likely prices would drop.
But in the last couple of months, the press has reported on housing inventory dropping in some markets and competitive pricing is most evident in the markets that suffered greatly from foreclosures such as Phoenix, Miami, and parts of Southern California. Markets like Phoenix and San Francisco are seeing some speculative purchasing and that is raising concerns about possible market bubbles.
If you're selling your home now should you be concerned? Not if you're taking the right precautions and hiring the most experienced industry professionals to assist you. Understanding the pros and cons of a particular market is vital.
According to the National Association of Realtors, nationally, first-time buyers made up only 35 percent of existing single-family home sales during the month of April. That compares to 40 to 45 percent of the market in better times.
Statistics like that matter because they point to economic barriers that could keep your home on the market longer than you desire. It's, of course, the tight credit lending restrictions, high unemployment rate, and overall unstable economy that are, in some cases, shutting out first-time buyers.
But the flip side is that continuing low interest rates are still drawing wannabe homeowners out to search for their perfect house which has likely dropped a good 35 percent from what it was during the housing peak.
Another factor contributing to the overall real estate market is that it's an election year. Due to uncertainty, some predict that buyers may be inclined to purchase before the end of the year. Others fear that, depending on the outcome of the election, some of the tax cuts currently in place will expire.
Also, your pricing could be affected depending on the style of home you're selling. The number of buyers interested in the senior housing market is increasing. Lots of Boomers are aging and they have many ailments. Apartment living lacks the privacy they desire but often single family homes aren't suitable. So housing that features senior-friendly accommodations like a master suite on the first floor tend to be in demand. If you have a home that is designed to allow buyers to age in place, it's a good idea to market it that way.
Remember when selling your home, follow a few simple rules. Study the market. Get expert advice. Know your target audience. Highlight the most desirable aspects of your home and, be realistic with your listing price.
Published: August 10, 2012