Luxury Homes Are Selling Slower

by 04 Oct 2012
(TheNicheReport) -- While most homes for sale are moving faster than they have in years, the median amount of time it takes to sell a luxury home has increased to more than six months and is still climbing. The median number of days on market for homes priced above $500,000 reached 187 days last week, higher than they have been all year. The nation’s most expensive homes at the top price tier are taking twice as long to sell as all listings, which move in 91 days according to August data from The factors that are driving price increases and faster sales are not have the same impact on luxury homes. Inventories, which are about 20 percent below last year for all homes are not as low for luxury homes.

According to the ILHM’s housing report, luxury homes remain in a cold buyers’ market even as lower priced properties are heating up. Sam Khater, a CoreLogic economist, estimates that lower-priced homes are appreciating three times faster than more expensive homes due to lower inventories and higher buyer demand in lower priced homes. As a result of the slow market, many sellers have lowered prices to generate buyer interest. Some 32 percent of luxury homes currently listed have experienced price decreases and 13 percent have been relisted after leaving the market. Luxury homes are selling slowest in Miami (304 days), followed by New York (289 days), Chicago (240 days), Tampa (232 days) and Philadelphia (218 days). Sales are hottest in Las Vegas (105 days), San Francisco (115 days), Silicon Valley (120 days), Dallas (116 days) and Washington, DC (119 days).

Manhattan residential sales have held flat in the face of a precipitous fall in inventory in the third quarter of 2012, according to third quarter numbers from Prudential Douglas Elliman. Yet inventory in Manhattan is down 24.3 percent year-over-year — its lowest level since 2005. In Sarasota, brokers report sales are quite brisk and inventory is lower than average, a 4.5 month supply of inventory. Last year at this time 20 percent more properties were available. In Silicon Valley, broker Dawn Thomas reports days on market is trending better and prices are increasing – not skyrocketing, but increasing. Broker Robert Paul reports luxury sales were up 25 percent over last year on Cape Cod in the first half of the year and for sale inventory was 17 percent smaller than last year.