Think the housing market has slowed to a crawl? Not in the luxury market, where business is booming, cash buyers are snatching up great deals and luxury homes are being sold for much less than the asking price.
Shawn Shackelton has been a Realtor in Scottsdale, Ariz.’s luxury market for over 13 years. She recently sold a $3.2 million home in the private gated community of Silverleaf and says that the luxury market has been extremely active in Arizona, a market that was hit hard by the downturn.
“Most of these are cash buyers,” Shackelton says. “Many have been watching this market for quite a while and are now getting significant discounts on these homes. Inventory is dropping, but prices are staying stable. With inventory dropping, it’s harder to find homes.”
From March 2010 to March 2011, the National Association of Realtors reported that international buyers purchased more than $82 billion in real estate, up 24 percent from the previous year. More than half is from Canada, Mexico, the United Kingdom, India and China.
“Some of these buyers are taking advantage of the favorable exchanges rates to buy mega mansions at a discount,” says Chad Rogers, a Hilton and Hyland Real Estate Agent in Malibu, Calif., and featured agent on the Bravo reality series “Million Dollar Listing.”
Rogers says that in his Los Angeles market, the Multiple Listing Service is reporting that so far in 2011, more $20-plus million priced homes have already been sold than compared to all of last year.
“The City of Los Angeles passed a new Hillside Mansionization Ordinance, which makes building on a hillside stricter for those looking to develop large estates,” he explains. “Buyers who are looking for mansions in the hills are willing to pay a premium for an already constructed property than buying land and building new.”
Affluent buyers also are grabbing hold of great deals in high-end communities of Los Angeles County. For example, Rogers says he represented a buyer on a $23.5 million property in Beverly Hills which was listed for $50 million back in 2007. “Although there is an uprise in über-luxury home sales, no property is immune to the market,” Rogers says.
In Miami, Melissa Rubin, broker and vice president of Platinum Properties International, says it’s all about the price. “Clearly, prices have significantly dropped since the crash with many properties priced at about two-thirds of what they were during the market height,” she says. “However, we are in critical pocket whereby the economy is starting to recover. Many are speculating exactly when prices are going to bottom out, but in some areas, they are starting to rise and these properties are getting snatched up quickly.”
According to Rubin, a key market to South Florida real estate is the foreign nationals, with a particularly strong representation from Brazil, Venezuela and Canada.
In Brazil they are enjoying a booming economy and want a close vacation spot,” she says. “In Venezuela the unstable economy is spurring them to take their money out of the country; and in Canada, our dollar is comparable to theirs and severe winters have them yearning for a South Florida hot spot – especially within Broward County.”
In New York, Heather McDonough of Prudential Douglas Elliman just sold comedian Dave Chappelle’s luxury home and says that high-end properties have to sell because the reality is that life happens and clients are moving and buying because they are having babies, getting married and divorced.
“In 2000, when things went south, they put their move on hold because of the uncertainty,” she says. “There has since been some recovery and people have to move.”
Her market, below Manhattan’s 34th Street, is short on inventory with no bargain to be found. “We almost lose touch with what’s going on in the national economy,” she says. “Manhattan is transient and it’s keeping the prices at a very healthy level. I’ve had five closings this year and they were pushing new pricing thresholds. You can find a bargain if you’re willing to buy under a million and do light renovation.”