Luxury Sales Warm up a Frigid Winter
03.4.14 09:42 AM
Polar vortexes are freezing home sales in much of the nation this winter but the luxury segment is finding the temperature to be just perfect as both sales and price increases warm up million dollar plus markets from coast to coast.
Economists at the National Association of Realtors reported sales at the upper end - million plus - are rising quite swiftly. Homes selling now may have more bedrooms, square footage, and other valuable amenities than homes that were sold last year.
Last week, CoreLogic’s Sam Khater suggested that the stock market is a barometer of the wealthy consumer’s confidence and million-dollar home sales and the S&P 500 are highly correlated. “In fact, the S&P 500 serves as a very good two-month leading indicator of million-dollar home sales. While the S&P 500 dipped in the last few weeks of January 2014, as of mid-February, it remains at roughly the same level as in December 2013, so one can expect million-dollar home sales to remain strong as long as the stock market remains high,” he wrote.
Market data from the Institute for Luxury Home Marketing confirms that compared to a year ago, the luxury market is thriving. National median prices for homes priced over half a million have risen to $1,322,653, up more than 7 percent from February 2013. Last year’s increase in luxury home sales reflects the combination of rising demand and sharp price appreciation that pushed many homes up over the million-dollar threshold.