Monday Market Update: High-End Home Sales Hit Top Speed

One size does not fit all – in many areas but in real estate too. Different types of homes are a fit for different buyers, and this season, the best financial fit is being found by those seeking high-end homes. Yahoo! Finance just published an article titled “The housing market is starting to look K-shaped too” which states that the “This spring, the housing market is split between haves and have-nots.” 

Sales at the lower end of the housing market have dropped in the past year, while sales at the $1 million-plus price point have increased 9.3% year-over-year. Selma Hepp, Chief Economist at Cotality (a property data firm) states that ““That’s really what you end up seeing in a lot of sectors of the economy — higher-income households are able to participate.” Move-up buyers have been ‘riding the wave’ and built significant equity, plus high earners are less impacted by inflation and more likely to have significant investment. On the other hand, first-time buyers have struggled with pricing since the pandemic and typically lack capital to serve as a down payment. 

Lawrence Yun, Chief Economist at the National Association of Realtors®, confirms that “We are seeing a little more movement on the upper end. This could be a reflection of the fact that the stock market is essentially at record-high conditions.”

Similarly, National Mortgage Professional reported earlier this month that “San Francisco’s housing market isn’t just splitting, it’s speeding up at the top.” Luxury home sales in SF jumped 22% year-over-year in March (non-luxury sales are up 3.8% annually), with days on market accelerating to just 12 days vs. 28 days last year. This data signals 5 months of double-digit gains in the city’s luxury segment. Note that the SF luxury sale median price is $6.8 million. 

While this trend makes it clear that opportunity is present for existing, long-time homeowners, that does not mean all hope is lost for those entering the market. It does, however, indicate that it is more challenging for first-time buyers and that market education, short and long-term strategies and financial knowledge are critical.

Please let us know if you need integrity-driven, trusted professionals to support your real estate goals. 

Cheers,

Bobbi 

Bobbi Decker
DRE#00607999

Broker Associate, Bobbi Decker & Associates
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www.bobbidecker.com
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