More Luxury Homes In America Linger On Market And Achieve Lower Prices, Concierge Auctions Report Shows
NEW YORK - April 22, 2019 - PRLog -- In a shifting U.S. luxury real estate market, homes are taking longer to sell; and when they do, the sale price tends to be well below the original ask. New York City-based Concierge Auctions, the world's largest luxury real estate auction firm, today releases its third annual "U.S. Luxury Homes Index", analyzing the top sales in 56 of the hottest luxury real estate markets. The index shows that the longer luxury properties stay on the market, the lower the price they receive.
Concierge Auctions examined the top 10 most expensive homes sold in each market to chart the overall health of the luxury tier. The research, drawn from MLS and public property record data, demonstrates that in every economic condition, days on market are an important consideration for luxury home sellers. By calculating this important metric, a window into the luxury real estate market emerges.
"For three years, our research has indicated that the largest factor in determining the price a luxury property will sell for is the number of days that it has been marketed for sale. Every day that a home sits on the market, it depreciates in value," said Laura Brady, president and founder of Concierge Auctions. "We continue to see that properties either sell quickly for close to their original list price, or they remain on the market for a long period of time and sell for a fraction of this price."
In 2018, the luxury market continued to be highly segmented with pockets of strength and weakness. As inventory increased in many areas, days on market rose and prices dropped. Of the 56 markets analyzed, the average sale price was $12,219.014. According to the National Association of Realtors®, the median home price for all housing types in December 2018 was $253,600—up 2.9 percent from $246,800 in 2017. This was lower than the 5.8 percent increase from 2016-2017, as the overall rate of price increases slowed nationwide.
The total days on market for the 56 markets evaluated in 2018 was 506 days. Only 38% sold under 180 days, with an average days on market of 81 days and a sale price of 88% to original list price—and for the 62% that sold over 180 days, it was 742 days and 78%, respectively. This difference of 10% can be substantial when dealing with multi-million-
When compared to the 40 markets reviewed in 2017, the average total days on market remained on par with 2017. The average total days on market for those markets was 467 in 2018, down 12.12 percent from 531 in 2017. The average for properties that sold under 180 days was down 2.4 percent from 2017. For properties listed for more than 180 days, the average days on market increased by 6.2 percent.
Through this data, areas of strength and weakness within specific markets can be identified. In general, markets that saw dramatic price increases also saw a similar increase in days on market as potential buyers waited for reductions.
Economic factors also influence how these luxury markets function. Last year, property taxes started to play a role. For example, in northern New Jersey, where taxes are high, the average days on market was 692 days.
Palo Alto and San Francisco, California continue to be two of the fastest markets for selling luxury homes at 86 days and 103 days, respectively. By contrast, Sarasota/Manatee Counties, Florida saw the highest average days on market of 1,109 days. Other markets with high average days on market included Las Vegas, Nevada at 1,020; Oahu, Hawaii at 981; and the entire state of New Hampshire at 948.
Markets that moved more slowly included including Sun Valley, Idaho, where none of the top properties sold in under 180 days and the average days on market was just under two years, at 705 days.
"In every market, luxury properties face unique challenges. These properties are highly distinctive and have a relatively small buyer pool. Not only does price have little bearing on demand, but buyers are often spread out over large geographic areas and they don't typically all arrive at once," said Chad Roffers, chairman of Concierge Auctions. "Days on market is an important indicator for gauging a market's activity. This valuable information can help agents and sellers anticipate the challenges they may encounter."
To receive the complete Concierge Auctions "U.S. Luxury Homes Index," call 212.658.1404.
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SOURCE Concierge Auctions
* Totals reflect 40 markets analyzed in 2017, 27 markets in 2016, and 27 markets in 2015.