Luxury Real Estate Making a Comeback!!
Luxury real estate is making a comeback in a big way. A pretty bold statement, but many signs are pointing to just that. Over the past couple of years, we’ve been fortunate to see the beginning of a real recovery in the residential real estate market throughout many areas within the Mid-Atlantic and Northeast regions of the United States. We have kept a close eye on those conditions affecting the residential housing market to watch for signs of recovery—particularly in the luxury market, which has been slower to come back around.
Encouragingly, there is a deluge of available statistics—national, regional, and local—that point to a clear sign that activity in the luxury market is picking up once again. In recent months, the luxury market has benefitted from stronger sales and a reduced inventory, shifting the market toward a more balanced relationship between buyers and sellers. A multitude of indicators, both nationally and in the Mid-Atlantic, are showing that the health of the market for luxury homes is improving.
During the recent economic downturn, the housing market was hit particularly hard. Demand for homes evaporated and distressed sales —such as short sales and foreclosures—flooded the market, which had an adverse impact on the real estate market both nationally and in the Mid-Atlantic region. This imbalance between the number of buyers and sellers affected home sellers in particular—creating an environment characterized by lower listing prices, less negotiation leverage, and an extended time-frame to sell a home.
Many of the indicators used to determine the health of the market are gaining momentum. This has been particularly evident in low-to middle-priced housing, a segment of the market that has recently seen a major decline in available inventory, and has experienced homes selling for closer to asking price in a shorter time frame when priced appropriately. Additionally, strengthening economic conditions—including an improvement in employment, increasing consumer confidence, and historically low mortgage rates—point to a unique opportunity in today’s housing market for both buyers and sellers. Real improvement in the real estate sector is not just on the horizon, but is here at our doorsteps.
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