A structural market change taking place nationwide is the ongoing surge in demand for higher-end housing. Existing U.S. home sales in February 2014 were off 7.1 percent when compared to a year ago. But what is selling based on price ranges tells a unique story. Home sales in the $1 million and up range jumped a whopping 37.5 percent.
The National Association of Realtors® (NAR) broke out an analysis of year-over-year changes in the number of sales by price ranges.
I reside in Houston, in which the multiple Listing Service (MLS) includes most (not all) of the sales in the Metropolitan Statistical Area (MSA). The Houston Association of Realtors’ MLS posted strong gains year-over-year. In 2013, $1 million and up sales rose a phenomenal 42 percent compared to 2012. Single family closings this February tallied 70 $1 million+ sales compared to just 53 a year ago. That’s another 32 percent gain. There is just 7.8 months inventory of these seven-figure-and up-properties available for sale today—perhaps the lowest level in more than a decade.
To read the NAR price range sales brief analysis, click http://blog.stewart.com/stewart/2014/03/24/the-doldrums-continued-for-existing-home-sales-in-february-but-i-expect-it-will-pick-up-as-the-weather-warms/
Florida is seeing much of the same. In February of this year, $1 million plus single family home sales were up 16.9 percent. To look at the statewide Florida Association of Realtors sales reports click http://www.floridarealtors.org/ResearchAndStatistics/Florida-Market-Reports/Index.cfm
So what does this mean for buyers and sellers? First, decreased sales in the lower price ranges indicates that distressed real estate inventory is now a minimal part of listings and sales. So there likely are fewer bargain buys remaining. For the higher-end, the real focus might be on current homeowners of higher-end properties that were waiting for a recovery to list the home for sale.
That time may be now.
All up, these data indicate the housing market recovery has progressed to the next step in higher end properties.
And that is good news for prospective sellers and current owners.