The wealthy may soon be feeling the pinch as the
luxury housing market takes a hit. According to RealtyTrac, homes listed
for over $1 million have dropped 20 percent in 2012. That means the
average sales price for expensive real estate homes has gone from $2.5
million, last year, to just above $2 million. Some higher-priced luxury
homes are even lopping off several millions of dollars in hopes of
finding buyers.
Interestingly, after many years of waiting and
hoping, the more vast real estate market is experiencing some price
stabilization and possibly even seeing prices rise a bit. Some say
that's because sellers are getting comfortable with the lower sales
price.
However, other experts argue that the increase is
more likely seasonal rather than a true sign that the market has
completely bottomed out. Part of the reason for the skepticism, industry
economic experts say, is because there is a large looming mass of homes
either nearing a foreclosure or already in progress. As those
foreclosed homes quickly and massively come into the marketplace, it's
likely prices would drop.
But in the last couple of months, the press has
reported on housing inventory dropping in some markets and competitive
pricing is most evident in the markets that suffered greatly from
foreclosures such as Phoenix, Miami, and parts of Southern California.
Markets like Phoenix and San Francisco are seeing some speculative
purchasing and that is raising concerns about possible market bubbles.
If you're selling your home now should you be
concerned? Not if you're taking the right precautions and hiring the
most experienced industry professionals to assist you. Understanding the
pros and cons of a particular market is vital.
According to the National Association of Realtors,
nationally, first-time buyers made up only 35 percent of existing
single-family home sales during the month of April. That compares to 40
to 45 percent of the market in better times.
Statistics like that matter because they point to
economic barriers that could keep your home on the market longer than
you desire. It's, of course, the tight credit lending restrictions, high
unemployment rate, and overall unstable economy that are, in some
cases, shutting out first-time buyers.
But the flip side is that continuing low interest
rates are still drawing wannabe homeowners out to search for their
perfect house which has likely dropped a good 35 percent from what it
was during the housing peak.
Another factor contributing to the overall real
estate market is that it's an election year. Due to uncertainty, some
predict that buyers may be inclined to purchase before the end of the
year. Others fear that, depending on the outcome of the election, some
of the tax cuts currently in place will expire.
Also, your pricing could be affected depending on
the style of home you're selling. The number of buyers interested in the
senior housing market is increasing. Lots of Boomers are aging and they
have many ailments. Apartment living lacks the privacy they desire but
often single family homes aren't suitable. So housing that features
senior-friendly accommodations like a master suite on the first floor
tend to be in demand. If you have a home that is designed to allow
buyers to age in place, it's a good idea to market it that way.
Remember when selling your home, follow a few
simple rules. Study the market. Get expert advice. Know your target
audience. Highlight the most desirable aspects of your home and, be
realistic with your listing price.
August 10, 2012 -- Realty Times Feature Article by Phoebe Chongchua
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