May 27, 2018

Polar Vortex Hasn't Frozen Luxury Sales

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Polar Vortex Hasn't Frozen Luxury Sales

Though the frigid weather has cooled home sales in most of the nation this winter, the luxury housing market has been sizzling. Sales of homes with a million-plus price tag have been rising, the National Association of REALTORS® reports.

The national median price for homes priced at more than $500,000 has increased to $1,322,653 – a 7 percent rise compared to February 2013, according to market data from Luxury Home Marketing. Luxury homes are selling faster, too, spending 26 fewer days on the market.

“The luxury market is unique, always has been,” says John Walsh, president of DataQuick. “Things like job growth, mortgage interest rates, and migration patterns do not play the same role as IPOs, stock market performance, or how well one type of investment does compared to another, and where one wants to park one’s excess money.”

CoreLogic’s Sam Khater recently suggested that the stock market is a strong gauge of consumer confidence in the luxury real estate market. He argues that million-dollar home sales and the S&P 500 are closely correlated.

“The S&P 500 serves as a very good two-month leading indicator of million-dollar home sales,” Khater writes. “While the S&P 500 dipped in the last few weeks of January 2014, as of mid-February, it remains roughly the same level as in December 2013, so no one can expect million-dollar home sales to remain strong as long as the stock market remains high.”

Source: “Luxury Sales Warm Up a Frigid Winter,” RISMedia (March 3, 2014)

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