Increase in Luxury Listings Fueled by Low Interest Rates
NEW YORK ( MainStreet) The housing market is on the rise again after years of depreciation since the financial collapse of 2008 and so is the demand for luxury housing, according to a new study that tracks housing opportunities of $2 million or more.
"Affluent people who made it through the recession are now able to get into zip codes they couldn't get into before at about the same price with 30-year fixed-rate jumbo mortgages at a 4.5% interest rate," said Van Davis, president of ZipRealty's brokerage operations. "That's hard to beat."
"Incredibly low interest rates are driving purchases in luxury housing markets," Davis told MainStreet.
Top Ten Cities With 20%-Plus Increases in $2M-Plus Listings
- 1) Sacramento - 180%
- 2) Dallas - 74%
- 3) Houston - 53%
- 4) Las Vegas - 40%
- 5) Boston - 35%
- 6) D.C./Northern Virg. - 29%
- 7) Denver - 27%
- 8) Westchester - 27%
- 9) Long Island - 26%
- 10) Orlando - 26%
Below we'll drill down into the list.
Spotlight on Sacramento
Sacramento, Las Vegas and Orlando are surprise additions to ZipRealty's 2013 top 10 list of cities with the highest percentage increase in luxury listings. The state of California holds the highest-priced real estate in the U.S. and has seen the greatest increase in average prices.
While Sacramento saw a 180% increase in luxury listings, the median sales price in California was up 34.7% from $297,000 to $400,000 since August 2012, the highest in the nation tracked by ZipRealty.
"The Sacramento housing market was hurt during the downturn because of significant foreclosures," Davis said. "But now there are enclaves in Sacramento, such as Granite Bay, which are known for the right zip codes. There's an availability of fine homes at significant prices and a bevy of neighbors that are athletes and celebrities.
International Luxury Buyers Flood Miami
Marina Palms Yacht Club & Residences located in North Miami Beach has already pre-sold 90% of the first of two towers that will someday be home to 468 condos.
"It indicates that Miami is a premier destination given its desirable sunny climate as well as its proximity to major demand centers in Latin America and the eastern seaboard," said George Helmstetter, principal of The DevStar Group.
Located on Biscayne Boulevard, the average sales price of a residence is $1 million with entry level units starting at $600,000 and penthouses listed for $4.3 million.
Although Miami didn't land on ZipRealty's top ten list of increased luxury listings, the city's home resale inventories increased by 96% since July 2013, according to data by Movoto.com
The demand for luxury housing in Miami is largely derived from international buyers residing in Brazil, Mexico, Argentina and other South American nations.
"They are looking for expansive units, top-of-the-line Italian cabinetry and open floor plans for family entertaining," Helmstetter told MainStreet. "Buyers are requesting that residences contain separate quarters to accommodate the help that the affluent often travel with."