High-end homes selling briskly
Though housing inventory is down across the country, high-end homes are seeing a resurgence in many markets.
Part of the reason: Owners have decided to accept less than they originally wanted for their properties, Vice President Daren Blomquist of RealtyTrac said earlier this year.
And mortgage rates have been favorable: Last week the average rate on a 30-year loan dipped to the lowest since records were kept starting in 1971; jumbo loan rates also are following the trend.
Sales of homes priced between $750,000 and $1 million rose 53% in October compared with a year ago, according to The Wall Street Journal. And the Journal reported that homes sold in major metro areas with a loan of $1 million or more were up almost 28% through September compared with the same period last year, the highest total since 2008, according to real-estate information company DataQuick.
“I think that what we’re seeing now … is that the price point between $1 million and $2 million is hot, hot, hot,” said Louise Hampton, who has been selling high-end homes in California’s Coachella Valley for more than three decades. “When you start getting over $2 million, it has been a little bit slower, but we’re just off the summer months” when sales here can be slow as average temperatures top 100 degrees.
Randy Wiemer, chief executive of the Palm Springs Regional Association of Realtors, said 67 more homes valued at $1 million or more in this area have sold so far this year compared to the same period in 2011 — 328 vs. 261, a 25% increase.
In some cities, high-end homes are on the market fewer days as well. Million-dollar homes were on the market an average of 116 days in Palm Springs so far this year, down from 175 days last year. Homes priced at $1 million or more represent a small slice of the overall market with high concentrations in California and New York.
“We’re all hopeful we’ll start to see a buildup of inventory,” Hampton said. “I think we all have buyers who want particular types of properties that aren’t out there right now.”
One multimillion-dollar house that will be on the market in January: The 22,000-square-foot, curved-roof, ultramodern Palm Springs home of comedian Bob Hope, whose wife, Dolores, died Sept. 19, 2011.
Terri Munselle, who tracks inventory and sales at nine high-end country club and golf communities such as The Hideaway in La Quinta, Calif., said her own analysis of inventories in recent weeks shows a 30% drop in inventories compared with 2010 and a 25% decline from 2011, yet sales are up 9% to 10%.
“I think people were waiting for the other shoe to drop with the election,” Munselle said.
Munselle anticipates even more activity and competition for high-end homes once Congress deals with the much-talked about “fiscal cliff” and the economy gains traction. When Canadians begin coming south for winter, they often are willing to pay cash for their purchases and that typically boosts competition for some high-end homes here.
Jim Franklin, a broker associate with Prudential California Realty here and past president of the Palm Springs Regional Association of Realtors, said he has seen some high-end homes overpriced, and they are the ones that typically don’t sell for months.
“Some (high-end) sellers just say, ‘Let’s put it on the market and see what happens,’ ” Franklin said.
But he advised them to look at other high-end homes in popular locations and compare to see what buyers are getting for their money.
Prices remain far below the pre-crash levels of 2007.
The average sale price nationwide for top-tier real estate fell in the first half of this year to $2.1 million, a 12% decrease from the same period in 2011 and 17% compared with the same time in 2010, according to RealtyTrac.
Across California, homes that sold for a million dollars or more were on the increase, said analysts at the San Diego-based real-estate information service DataQuick.
More than 7,700 homes in the state sold for $1 million or more during the second quarter, up 18.5% from the same period last year, the company reported.
The second quarter’s million-dollar sales were the highest since third quarter 2007 when almost 11,000 properties changed hands. The highest quarter in DataQuick’s records, which go back to 1988, was third quarter 2005 when almost 16,000 high-end homes sold in the state.
“This market always responds to its own set of incentives,” DataQuick President John Walsh said. “If your money is parked in a savings account or something else that is low-risk, you’re not making much and real property might look good.”