Optimism + Demand + Low Mortgage Rates = Strong Sales
Redfin reported last week that, “Luxury sales were strong. Sales of homes priced at or above $1 million were up 22.2% from a year ago, while sales of homes priced at or above $5 million were up 19.6%. The strong growth in sales, especially paired with the falling supply, suggests that high-end buyers have confidence in the economy and see U.S. real estate as a smart place to invest their wealth.”
“This is the first time since the fourth quarter of 2014 that luxury homes had stronger price growth than homes in the bottom 95 percent of the market.”
According to the report, the average luxury home price rose 7.5% in the second quarter of 2017 compared to last year, to $1.79 million.
In general, the high-end luxury real estate market in NJ is beginning to see some activity from prospects who are seeking stability and growth from around the world. What is more is that New Jersey retains great access to strong metro centers such as New York, Washington and Boston.
And in some cases, in markets like New Jersey, properties are being bought by the affluent and wealthy.
In general, in many markets, the luxury market has not participated equally with the other market niches.
Even in the luxury real estate market, inventory is becoming a very real factor.
The average price for non-luxury homes was up 7% to $336,000 from 2016, based upon the analysis of the report, with one in four homes in the bottom 95%.
Fast Facts
■ The number of million-dollar-plus homes for sale dropped by 9.4%.
■ The luxury market is not as competitive as other markets.
■ Only one in 50 luxury homes sold above list price in the second quarter of 2017.