It’s still very much a “cold” buyer’s market according to the Institute for Luxury Home Marketing’s April 24 Luxury Housing Report, but early numbers from the spring home buying season suggest that demand is warming up.
Inventories of homes over $1 million built up over the winter, but even with more properties coming on market with warmer weather, increasing the national inventory fron 27,500 to 32,500 since January, days on market have dropped markedly in recent weeks. The rolling median of homes on the market seen days or less has fallen the most since the first of the year, from 175 days to 130.
Market seeing an improved “market action index” for the week are Washington, DC, Houston, Las Vegas, Miami, New York, Philadelphia, Phoenix, San Francisco, Seattle, Silicon Valley and Tampa. Median price nationally for a home in the luxury category is stable at $ 1,056,759.
Luxury property marketers were encouraged by the latest tracking study from the American Affluence Research Center which found that, in contrast to the March general Consumer Confidence Index of The Conference Board, which fell over 10% to the low levels last seen in Fall 2010, affluent buyers who account for about half of all consumer spending, report a better outlook for the economy and their personal spending plans.
About 10 percent of the affluent say they will seriously consider acquiring access to a vacation home during the next 12 months. Plans to make an acquisition increase as age declines, income increases, and net worth increases. About 2.9% are considering two types of vacation home acquisition. Wholly-owned homes are the most favored type of vacation home access. Wholly-owned homes used primarily on a seasonal basis are more popular than those used frequently throughout the year. The only exceptions are the 50 to 59 age group, the under $200K income group, and the lowest net worth group.
In fact, spending plans for all 17 products, including major expenditures for new autos, cruises, and luxury vacation homes are much stronger this spring than they were six months ago.
The AARC survey was based on the responses from 405 men and women who promptly responded and met the minimum net worth requirement of $800,000. Their households have an average annual income of $333,000, an average net worth of $3.1 million, average investable assets of $1.8 million, and an average primary residence value of $1.1 million.