By DON FENLEY
TRI-CITIES, Tenn. – Existing home sales in the $500K and up price ranges have become a market contradiction in the latter half of this year. While the overall market is headed to pre-pandemic levels, high-end sales began moving up in June. They’s also bucking stalled national luxury home sales reports that are weakening the wake of higher interest rates and recession fears.
So far, the increase hasn’t brought the local year-to-date numbers above the first nine-months of last year’s total but given the current momentum that is likely next month. It’s also a dynamic that is keeping the overall market’s median sales price stable as sales decline.
Sales in the $500K and up price range accounted for 13% of all single-family existing home sales in October. That’s a big shift in the historical market share pattern.
Local sales in the $500K and up price range accounted for about 1.5% of all sales from 2010 to 2018. In 2019 they ticked up to 2% of sales. They have increased every year since. Last year’s annual total 8.7% of sales. So far this year, the market share is 10.6% of all sales.
Daryl Fairweather, chief economist at Redfin, has been quoted by many mass media reports saying, “The luxury market is hurting in terns of transactions. Even when you compare it to the rest of the market, it’s looking like luxury has really cooled off.”
It’s another example of the hyper-local nature of housing markets and the danger of giving too much credence to nationalized numbers instead of local market realities.
One reason for the resilience of the higher end of the local market is likely the value proposition.
Although there are a lot of complaints about how much local prices have increased, local prices are a bargain when compared to many other markets.
Local multi-million plus sales are also holding their own even as the overall market continues stabilizing after the past four years of unsustainable growth.
Categories: REAL ESTATE