ILHM Luxury Housing Weekly Report

Monday August 29, 2016

THIS WEEK

The ILHM National Report this week looked at 25255 luxury homes on the market. The ILHM Luxury Composite Price this week is $1,506,025. These homes have been on the market for an average of 153 days.

The Market Action Index measures available supply relative to the current level of demand. Index value above 30 indicates conditions favor the seller. See the section below for full details.

PRICE
Luxury home prices across the ILHM National sample have stayed relatively stable in recent weeks. This week median price is $1,506,025.

PRICE PER SQUARE FOOT
Price per square foot gives us a view to changes in how luxury homes are valued as well as how they're being constructed. Currently median price per square foot in the luxury homes is $396.

SUPPLY AND DEMAND
Residential prices are a function of supply and demand, and market conditions can be characterized by analyzing those factors. Watch this index for sustained trends and an early view on coming price changes.

The ILHM National market is currently in the Buyer's Market zone (below 30), though not strongly so. The Market Action Index stands this week at 29 so luxury buyers should expect to find reasonable levels of selection

INVENTORY
This chart illustrates the total number of homes in the ILHM sample each week. These are homes on the market for at least $500,000 in the top 10 zip codes for 31 major metro markets around the county.

DAYS ON MARKET (DOM)
The properties have been on the market for an average of 147 days

LUXURY BY REGION
A look at the local luxury markets around the country.

Luxury Home Sales & the Impact of the Stock Market

In a recent post, CoreLogic looked at the correlation between stocks and the sales of upper-end properties ($1 Million+ sales price). The report revealed:

“The powerful ‘wealth effects’ generated by the rapid rise in equities between 2009 and 2015 drove a large rise in the sales of homes that sold for $1 million or more.

Historically, sales of homes priced $1 million or more averaged 1.2 percent of all home sales. The spread between high-end sales and equities widened during the housing bubble but then moved more closely in unison. By the time the equity markets had peaked in May 2015, the $1 million or more share of the market had nearly doubled, averaging 2.2 percent for the remainder of the year.”

This makes sense. As people see their wealth increasing, they feel more confident in their purchasing power. And, of course, that would also impact their decisions regarding real estate. The stock market dipped earlier this year and there was quite a bit of anecdotal evidence that the upper-end market was beginning to soften.

As we can see in the chart below, the market is again flourishing. That may rejuvenate the luxury market as we move through the rest of the year.

As we proceed through 2016 and enter 2017, the strength of the stock market will be a key factor in the strength of the luxury market. If the stock market falters, look for high-end sales to slow. If the market advances, as it has shown signs of doing most recently, the high-end market will advance.

Real Life vs. Reality TV: 5 Myths Explained

Have you ever been flipping through the channels, only to find yourself glued to the couch in an HGTV ‘show hole’*? We’ve all been there… watching entire seasons of “Love it or List it,” “Fixer Upper,” “House Hunters,” “Flip or Flop,” “Property Brothers,” and so many more, just in one sitting.

When you’re in the middle of your real estate themed show marathon, you might start to think that everything you see on TV must be how it works in real life, but you may need a reality check.

Reality TV Show Myths vs. Real Life:

Myth #1: Buyers look at 3 homes and make a decision to purchase one of them.

Truth: There may be buyers who fall in love and buy the first home they see, but more often than not the process of buying a home means touring more than three homes.

Myth #2: The houses the buyers are touring are still for sale.

Truth: The reality is being staged for TV. Many of the homes being shown are already sold and are off the market.

Myth #3: The buyers haven’t made a purchase decision yet.

Truth: Since there is no way to show the entire buying process in a 30-minute show, TV producers often choose buyers who are further along in the process and have already chosen a home to buy.

Myth #4: If you list your home for sale, it will ALWAYS sell at the Open House.

Truth: Of course this would be great! Open Houses are important to guarantee the most exposure to buyers in your area, but are only a PIECE of the overall marketing of your home. Just realize that many homes are sold during regular showing appointments as well. 

Myth #5: Homeowners make a decision about selling their home after a 5-minute conversation.

Truth: Similar to the buyers portrayed on the shows, many of the sellers have already spent hours deliberating the decision to list their home and move on with their life/goals.

Having an experienced professional on your side while navigating the real estate market is the best way to guarantee that you can make the home of your dreams a reality!

*Show Hole - A side effect of binge-watching. Symptoms include a sense of emptiness and depression brought on by realizing you just wasted a good portion of your life watching several seasons of a TV show or an entire movie franchise all at once when you could have managed your time better.

ILHM Luxury Housing Weekly Report

Monday August 22, 2016

The ILHM National Report this week looked at 25501 luxury homes on the market. The ILHM Luxury Composite Price this week is $1,509,757. These homes have been on the market for an average of 151 days.

The Market Action Index measures available supply relative to the current level of demand. Index value above 30 indicates conditions favor the seller. See the section below for full details.

PRICE
Luxury home prices across the ILHM National sample have stayed relatively stable in recent weeks. This week median price is $1,509,757.

PRICE PER SQUARE FOOT
Price per square foot gives us a view to changes in how luxury homes are valued as well as how they're being constructed. Currently median price per square foot in the luxury homes is $395.

SUPPLY AND DEMAND
Residential prices are a function of supply and demand, and market conditions can be characterized by analyzing those factors. Watch this index for sustained trends and an early view on coming price changes. The ILHM National market is currently in the Buyer's Market zone (below 30), though not strongly so. The Market Action Index stands this week at 29 so luxury buyers should expect to find reasonable levels of selection.

INVENTORY
This chart illustrates the total number of homes in the ILHM sample each week. These are homes on the market for at least $500,000 in the top 10 zip codes for 31 major metro markets around the county

DAYS ON MARKET (DOM)
The properties have been on the market for an average of 147 days.

LUXURY BY REGION
A look at the local luxury markets around the country.

Where Are Home Prices Headed Over the Next 5 Years?

Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey.

Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts, and investment & market strategists about where they believe prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey:
Home values will appreciate by 4.5% over the course of 2016, 3.6% in 2017 and about 3.2% in the next two years, and finally 2.9% in 2020 (as shown below). That means the average annual appreciation will be 3.5% over the next 5 years.

The prediction for cumulative appreciation increased over a full point from 17.5% to 18.7% by 2020. The experts making up the most bearish quartile of the survey are still projecting a cumulative appreciation of 11.1%.

Individual opinions make headlines. We believe the survey is a fairer depiction of future values.

ILHM Luxury Weekly Housing Report

Monday August 15, 2016

THIS WEEK
The ILHM National Report this week looked at 25743 luxury homes on the market. The ILHM Luxury Composite Price this week is $1,513,949. These homes have been on the market for an average of 148 days.

The Market Action Index measures available supply relative to the current level of demand. Index value above 30 indicates conditions favor the seller. See the section below for full details.


PRICE
Luxury home prices across the ILHM National sample have stayed relatively stable in recent weeks. This week median price is $1,513,949.


PRICE PER SQUARE FOOT
Price per square foot gives us a view to changes in how luxury homes are valued as well as how they're being constructed. Currently median price per square foot in the luxury homes is $394.

SUPPLY AND DEMAND
Residential prices are a function of supply and demand, and market conditions can be characterized by analyzing those factors. Watch this index for sustained trends and an early view on coming price changes.


The ILHM National market is currently in the Buyer's Market zone (below 30), though not strongly so. The Market Action Index stands this week at 29 so luxury buyers should expect to find reasonable levels of selection.


INVENTORY
This chart illustrates the total number of homes in the ILHM sample each week. These are homes on the market for at least $500,000 in the top 10 zip codes for 31 major metro markets around the county.


DAYS ON MARKET (DOM)
The properties have been on the market for an average of 147 days

LUXURY BY REGION

A look at the local luxury markets around the country.

House Hasn’t Sold Yet? Take Another Look at Your Price!

The residential housing market has been hot. Home sales have bounced back solidly and are now at their second highest pace since February 2007. Demand has remained strong throughout the summer as many real estate professionals are reporting bidding wars with listings actually selling above listing price. What about your house?

If your house hasn’t sold, it is probably because of the price.

If your home is on the market and you are not receiving any offers, look at your price. Pricing your home just 10% above market value dramatically cuts the number of prospective buyers that will even see your house. See chart below.

The housing market is hot. If you are not seeing results you want, sit down with your agent and revisit the pricing conversation.

ILHM Luxury Housing Weekly Report

Monday August 8, 2016

The ILHM National Report this week looked at 25817 luxury homes on the market. The ILHM Luxury Composite Price this week is $1,518,988. These homes have been on the market for an average of 147 days.

The Market Action Index measures available supply relative to the current level of demand. Index value above 30 indicates conditions favor the seller. See the section below for full details.

PRICE 

Luxury home prices across the ILHM National sample have stayed relatively stable in recent weeks. This week median price is $1,518,988.

PRICE PER SQUARE FOOT 

Price per square foot gives us a view to changes in how luxury homes are valued as well as how they're being constructed. Currently median price per square foot in the luxury homes is $395. 

SUPPLY AND DEMAND 
Residential prices are a function of supply and demand, and market conditions can be characterized by analyzing those factors. Watch this index for sustained trends and an early view on coming price changes.

The ILHM National market is currently in the Buyer's Market zone (below 30), though not strongly so. The Market Action Index stands this week at 29 so luxury buyers should expect to find reasonable levels of selection.

INVENTORY 
This chart illustrates the total number of homes in the ILHM sample each week. These are homes on the market for at least $500,000 in the top 10 zip codes for 31 major metro markets around the county. DAYS ON MARKET (DOM) The properties have been on the market for an average of 148 days.

LUXURY BY REGION

A look at the local luxury markets around the country.

Home Sales Accelerate During The “Dog Days of Summer” [INFOGRAPHIC]

Some Highlights:

• Existing home sales have accelerated to the highest pace since February 2007 at an annual pace of 5.57 million.
• Inventory of homes for sale remains below the historically normal 6-month mark at a 4.6-month supply, down 5.8% year-over-year.
• Median home sales prices rose to $247,700, 4.8% higher than a year ago and replaced the previous peak in May of $238,900.

Slaying Myths About Home Buying

Brexit 1 Month Later: The Impact on Mortgage Rates

Just over a month ago, the United Kingdom decided to withdraw from the European Union in a decision commonly known as Brexit. At that time there was a lot of speculation on how that decision would impact the U.S. residential mortgage market. Today, we want to look at the impact of the first 30 days.

Most believed that the Brexit decision would drive mortgage rates down and keep them down for some time. As CoreLogic reported:

 “First-time buyers can count on continued low mortgage rates to help with affordability issues. Similarly, re-setting adjustable rate loans will have less of a rate shock, and in some cases may even go down.”

What has actually happened?

Initially, rates did fall. However, Freddie Mac has reported that rates have stabilized and have actually increased marginally each of the last two weeks. This prompted Freddie Mac Chief EconomistSean Beckett to say:

“Post-Brexit volatility tapered off over the last two weeks, allowing interest rates to bounce back a bit from their near-record 30-year mortgage rate lows.”

And, Capital Economics Property Economist Matthew Pointon believes rates will continue to increase:

“Given we expect Brexit will have a minimal impact on the U.S. economy, we see no reason to change our forecast for mortgage rates to reach 3.85% by the end of this year, and 5.0% by the middle of 2018.”

For now, it appears that the impact of Brexit on the U.S. housing market was not as dramatic as some thought it could be.