Luxury Housing Report: National Luxury Home Inventory up Sharply in 2009, Despite Price Cuts
The most recent ILHM National Luxury Market Report reveals that inventories in the luxury home market are growing, days-on-market rising, and price reductions becoming more frequent. The prediction? Watch for increasing short sales and foreclosures in the mansion market.
Dallas, TX (Vocus) June 13, 2009 –
Data as of June 1, released today by The Institute for Luxury Home Marketing (ILHM) for its ILHM National Luxury Market Report (http://www. luxuryhomemarketing. com/report) -- the leading measure of the U. S. luxury home market -- show that the inventory of luxury homes for sale has risen more than 20% in the first five months of 2009, while the days-on-market for active listings has increased 14% (to 185 days) for the same period. The report also reveals that 41% of the luxury homes on the market as of the first week in June, have had a price reduction in the prior 90 days. The statistically weighted national median price for homes in the study is $1.2 million.
“Typically the luxury home market survives economic downturns relatively unscathed,” said ILHM founder Laurie Moore-Moore. “Our ILHM Luxury Market Report data for the last quarter of 2008, made it clear that this real estate crunch is different. The luxury niche was the last market segment to slow, but the brakes are now on.
“The credit crunch, stringent loan requirements, job losses, and the shrinking of the portfolios of high net worth households have combined to create the perfect storm in the luxury market. Add the number of individuals who stretched to buy expensive homes using inappropriate loans, which they now can’t afford, and one can conclude that the luxury market will be getting even softer," added Moore-Moore. "Unfortunately, we’re predicting an increase in luxury short sales and foreclosures through the rest of 2009, as more financially strapped owners find it difficult to sell.”
The ILHM Luxury Market Report conclusions are reinforced by data from the National Association of Realtors indicating that there are 41 months worth of inventory of homes priced at $750,000 and above in the U. S., as compared to 18 months worth in 2007. According to Inside Mortgage Finance, as a percentage of homes sold, luxury homes in the $750,000 plus price range have dropped from 4.4% of total sales in 2007 to 2.3% in 2009.
“Even the markets which have been considered reasonably healthy -- like Dallas, Charlotte, and Austin – are showing evidence of a softer luxury market. The percentages of luxury home listings in those markets with a price reduction in the past 90-days were 47%, 41.5% and 46% respectively," added Moore-Moore. “In some respects, this may be the sign that sellers are becoming more realistic, an important step in beginning to clear inventory.”
About the ILHM National Luxury Market Report
The data for the ILHM Luxury Market Report (http://www. luxuryhomemarketing. com/report) is calculated by Altos Research for ILHM and is based on properties on the market at $500,000+ in the 10 most expensive zip codes in each of 31 regional markets. The national composite data is a weighted average of the data from each region. The “ILHM National Luxury Composite Price” is a statistical representation of the median price of the 10 most expensive zip codes in the 31 regions measured. The report is updated weekly and detailed charts are also available for each of the 31 markets.
About The Institute for Luxury Home Marketing
The Institute for Luxury Home Marketing trains real estate agents who work in the luxury market and awards the prestigious Certified Luxury Home Marketing Specialist (CLHMS) designation to members who meet strict performance standards. Based in Dallas, TX, The Institute has an international membership. For information: www. LuxuryHomeMarketing. com
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