High-End Housing Market - 5/21/14
Reflecting the increasing disparities in income and wealth in America, the high-end housing market remains active even while lower priced properties face waning demand. Home purchases of $1 million or more rose 7.8 percent in March from a year earlier according to recently released data supply by the National Association of Realtors. By contrast, transactions of $250,000 or less, while represent nearly two-thirds of the market, fell 12 percent.
Luxury home sales continue to climb in the midst of an improving economy and stock valuations that have nearly tripled since 2009. A U.S. price record for a single family home was recently established with the $120 million sale of a waterfront mansion on 50 acres in Greenwich, Connecticut. In February, loan applications for home purchases of $500,000 or more rose while declining for all other levels according to the Mortgage Bankers Association.
Meanwhile, slow wage growth, tight credit standards and rising prices have put homeownership out of reach for many Americans. Moreover, as reported in Bloomberg, investors have been draining the market of lower-end properties, leaving even fewer options for prospective first-time and entry level buyers.