Well fall has made its way in and the leaves are changing, temperatures are milder, and the holidays are approaching. A perfect time to show all the amenities of your community. As we gear up from our annual conference which has a spectacular array of presenters, we invite you to participate if you haven’t already registered. You do not want to miss this event with speakers such as Craig Lawn, Judy Randell, Dr. Mark Fagan along with the many panel discussions on ROI, Golf Courses, social media, sales and marketing, economic impact study’s just to name a few! The AARC prides itself on providing formative resources for our members and to help reach that potential retiree and visitors with as much information to make a decision on their next step in life. We hope to see you in Wilmington next month!
The latest measure of the U.S. economy has been released: new home sales. The number of new homes sold in August dropped to 560,000 at an annualized rate, a decline of 3.4% from the rate in July and 1.2% from the rate in August 2016. This continues a trend of relatively slow sales by historical standards. Source: Census Bureau (5-page PDF)
Housing starts decreased by 4.7% in September from the previous month. The decline was nearly equal for single-family homes and larger types of residential housing. Authorizations for single-family homes were up by 2.4% from the previous month, however, a potential sign of future growth. Source: Census Bureau (7-page PDF)
Andre’ Nabors Chair, The AARC
Luxury Homes Can’t Keep Up With High Demand
Diana Olick, CNBC.com | October 26, 2017
- The top 5 percent of homes by price sold in the third quarter saw their values increase 4.9 percent compared with a year ago, hitting an average of $1.71 million, according to Redfin.
- The number of homes for sale priced at or above $1 million fell just over 18 percent compared with the same period last year.
The number of multimillion-dollar listings is suddenly dropping, and that is only making these pricey homes, well, pricier.
The top 5 percent of homes by price sold in the third quarter saw their values increase 4.9 percent compared with a year ago, hitting an average of $1.71 million, according to Redfin, a real estate brokerage.
The higher prices are the result of a sharp decline in listings in the luxury sector. The number of homes for sale priced at or above $1 million fell just over 18 percent compared with the same period last year.
“There is still strong buyer demand for high-end homes,” said Redfin’s chief economist, Nela Richardson. “Despite declining inventory, luxury sales soared in the third quarter.”
Sales of homes priced at or above $1 million were up 11 percent from a year ago, while sales of homes priced at or above $5 million were up almost as much at 10 percent, Richardson explained.
At the ultra-high end, the number of homes priced at or above $5 million fell 19 percent. This marked the first quarter in which super luxury listings fell year over year since Redfin began reporting on the luxury market in 2014.
Given the high demand, supplies will likely continue to fall. Homebuilders are turning their attention to the lower end of the market, where demand has been rising for years and where the lack of supply is acute. The average price for nonluxury homes was $336,000 in the third quarter, up 5.3 percent compared with a year earlier.
Luxury homes are also selling faster, although not as fast as the rest of the market. Luxury homes in the third quarter sold on an average of 70 days, four days faster than a year ago. Nonluxury homes sold on an average of 53 days, a full week faster than last year.
There may be several reasons for the surge in luxury demand. The U.S. stock market has been on a tear all year, hitting new highs almost daily. Demand from foreign buyers, who tend to favor the luxury market, has also been strong.
Of course all real estate is local, and high-end homes are no different. The town of Longmont, Colorado, led the nation with the biggest annual price jump in the luxury sector. The average price increased 34.7 percent to $1.55 million compared with last year. Fort Lauderdale, Florida, also saw big gains in luxury prices, (+28.7 percent) as did St. Petersburg, Florida, (+19.6 percent).
The average price for a luxury home fell furthest in the third quarter in the cities of Delray Beach, Florida, San Francisco and Boca Raton, Florida, where prices fell 26.9 percent, 14.7 percent and 13.8 percent, respectively, compared with last year.
- The U.S. National Home Price NSA Index rose 6.8 percent in August, according to data from S&P CoreLogic Case-Shiller.
- “Home prices have reached new all-time highs,” S&P Dow Jones indexes managing director David Blitzer said.
National home prices continued to rise in August, reporting a 6.1 percent annual gain on the S&P’s most broad indicator. This was better than the 5.8 percent increase expected by economists polled by Reuters.
“Home price increases appear to be unstoppable,” S&P Dow Jones indexes managing director David Blitzer said, before adding that national “home prices have reached new all-time highs.”
Another key index, which covers home prices in 20 cities across the U.S., registered 5.9 percent in August, up from 5.8 in July.
Seasonally adjusted, nine of the 20 cities in the composite reported price increases in the year ending August 2017. Seattle, Las Vegas, and San Diego reported the highest year-over-year gains among the 20 cities.