The 2007 State of the Luxury Home Market Report
August 23, 2007 by Jim Remley
The Luxury Home Council recently released a new report entitled - The 2007 State of the Luxury Home Market Report which highlights some interesting facts about the affluent market. Not surprisingly, real estate professionals who sell luxury homes are optimistic about the affluent market with 55 percent expecting to see either strong or modest growth within the high-end housing sector over the next twelve months. This positive outlook is bolstered by the fact that the world economy grew 25% in 2006 according to Forbes Magazine, the fastest growth in recorded history. As most luxury home buyers describe themselves as either a large business executive (46%) or an entrepreneur (51%) this has led many to either purchase or upgrade to a luxury home. One clear indicator of this growth - the Census Bureau’s decennial census which revealed that the number of homes valued in the $1 million plus range increased 470 percent between 2000 – 2005 accounting for 1.92 percent of the national home inventory. Even while noting a flattening of home prices and an oversupply of inventory in the short term, Toll Brothers, the largest builder of luxury homes in the country, remains bullish about the long term expansion of the luxury housing market. They point to several key factors:
- $100,000+ income households are growing 5.4 times faster than all U.S. households.
- Baby Boomers, the driving force behind the luxury home expansion are now in their prime move up home buying years.
- Household growth is expected to accelerate from about 12.6 million over the past ten years to about 14.6 million over the next ten.
In a survey released by the American Affluence Research Center the wealthiest 10% of Americans feel positive about their likelihood of buying and investing in real estate over the next twelve months. In fact, according to the report, luxury home purchases could top 1.1 million homes by May 2008 equaling 16 percent of all homes sales. This includes 49 percent of the new construction market and 11 percent of the pre-owned home market. Download the entire report!
| Attachment | Size |
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| StateoftheLuxuryMarket2007.pdf | 99.38 KB |
How much is your home worth? Well, it all depends where you live.
The real estate market is still shaking. New data suggests that home prices have hit a new record low. In every new study that comes out, homeowners from Miami, to Las Vegas, Phoenix and Los Angeles, have seen their home value go lower every time.
Is that disappointing? Of course it is.
Should we sell? Is not a good time.
Should we stick to it? Yes, if you can.
Have we hit bottom? Nobody knows.
Banks are facing their worst foreclosure crisis.
Don’t take me wrong, it’s good if you are in the market to buy a home for yourself or if you are an investor, but if you are not, and you own a home, most likely the value of your property is down at least 15 %.
Why do banks care if you are loosing your home? By having to sell repossessed homes, banks have to literally slash their prices down. It gets very costly for them, after all, they have to pay property taxes, maintenance costs, and whatever utilities that need to be paid, all of this expenses for a house that it’s just sitting there, vacant, and the bank is getting nothing in return.
The latest study by the S&P/Case-Shiller Home Price Index of 20 cities, revealed the news that for 22 consecutive months home prices dropped. Only from April to May, 2009 the decline was of 0.9 %
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