Mansion Global Article Featuring our Belltown Penthouse Listing
U.S. Luxury Prices Return to ‘Normal’
Miami and Park City, Utah, are buyers’ markets, San Francisco and Seattle are for sellers
BY BECKIE STRUM
ORIGINALLY PUBLISHED ON FEBRUARY 13, 2018
A home from Seattle, one of the fastest-moving luxury markets in the country, is selling for $13.8 million.
REALOGICS SOTHEBY’S INTERNATIONAL REALTY
U.S. luxury markets have entered a “new normal” of subdued price growth after eight years of frenzied appreciation post-recession, according to a report Tuesday by Coldwell Banker Global Luxury.
Across nearly 50 U.S. markets, there are signs of slower, more sustainable growth ahead, according to data covering the top 10% and top 5% of sales in 2017. The report underscores high-end price stabilization that Mansion Global has previously reported in markets including New York and Los Angeles.
MORE: Manhattan Prices Poised for a Slowdown
“The luxury real estate market led the general housing market out of the global recession, and during that explosive upswing, we saw some of the largest year-over-year price gains ever,” said Diane Hartley, general manager for The Institute for Luxury Home Marketing, Coldwell Banker Luxury’s partner in data collection for the report.
“Now we are simply seeing a return to a more typical pricing and sales paradigm—especially for single-family detached properties,” Ms. Hartley added.
Buyers’ markets
For some major metropolitan areas, talk is more of softness than of stabilization. In cities such as Miami and Park City, Utah, wealthy buyers are benefiting from oversupply and negotiability.
Coldwell Banker and the Institute for Luxury Home Marketing looked at metrics like new listing inventory, list-to-sales-price ratio and days on market to identify the top cities where buyers have the upper hand in luxury transactions.
Despite strong activity in South Florida, well-heeled buyers are likely to have an edge in Boca Raton and Delray Beach, Florida, as well as in Miami proper. Many snowbirds flocking from the Northeast, Canada and even California benefit from comparatively cheap luxury homes in Florida.
“The majority of our buyers are moving from the Northeast and California, where they’re accustomed to paying up to $3,000 to $4,000 per square foot,” said Jonathan Postma, sales associate at Coldwell Banker Residential Brokerage in Boca Raton, in the report. “Here, they can find brand-new construction and fully furnished properties for around $1,000 per square foot.”
For ski bunnies, Park City is one of the nation’s top luxury buyer markets. And sun worshippers have the upper hand in the Santa Barbara, California, and Scottsdale, Arizona, markets, according to the report.
MORE: Seattle and Brooklyn Saw Soaring Luxury Prices in 2017
Sellers market
A handful of U.S. luxury markets have too little inventory to meet demand, causing bidding wars and giving sellers the upper hand.
Such is the case where industry is hot and companies are attracting and spawning new millionaires to an area. Take Silicon Valley, where the average luxury condo sold for nearly 8% more than the asking price in 2017.
“The No. 1 factor is obviously the huge number of well-paid tech workers and executives,” said Brett Caviness, a sales associate at Coldwell Banker Residential Brokerage in Menlo Park, in the report. “There is also a large number of buyers from Asia and Europe with greater financial resources than local buyers who are looking at their purchase for long-term appreciation.”
In Seattle, the median luxury single-family home was on the market for less than a week and a half, one of the fastest markets in the country.
Sellers are also benefiting from a friendly market in San Francisco, Nashville, Tennessee; and Denver, according to the report.
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