LUXURY SOARS
Luxury Housing Emerged From The Lockdowns Of Covid-19 With Unbelievable Strength And Has Reached Unprecedented Levels
What sparked the wave of luxury sales? The run-up on Wall Street has certainly helped. After the S&P plunged 32% at the beginning of the pandemic in March 2020, it nearly doubled since, swelling by 94%. It surpassed the prior, pre-COVID, record height in August 2020. The record low interest rate environment is a key factor in luxury’s elevated demand as well. And, the inventory crisis does not only include the lower ranges, luxury buyers have been confronted with an extremely limited supply of available homes to purchase.
The luxury home market in Orange County, defined as the top 10% of all closed sales, moved from $1.25 million in 2020 to $1.5 million at the start of 2021. In September, there were 524 luxury closed sales. That would be a record level in any other year, but not this year. April through August were all higher, with a 672-peak reached in June. Last year’s record, 420 luxury sales, was achieved in September and surpassed the prior annual record set in June 2017 by 39%. Even with September’s slight seasonal dip in home sales above $1.5 million, it is still 25% higher than last September.
A warning to luxury sellers: luxury may be hotter than ever before, but it still is not as hot as the lower price ranges.
It takes a little bit longer to sell homes priced above $2 million. It is not an “instant market” like everything priced below $2 million. There are not as many multiple offer situations, there are fewer showing, and fewer homes sell above their asking prices.
Click on the image below the Read the Orange County Housing Report.
