Across North America the median sales price of single-family homes in the luxury market has decreased by $22,500 from December 2018 to January 2019, according to our monthly Luxury Market Report. As we head into a transitioning market, where buyers have more options, it’s more important than ever to use statistics to understand what’s influencing property value. What do those statistics say? There are at least a few cities that are bucking the national housing trends.
Our current Luxury Market Report reveals which cities are seeing strong numbers. Here’s how to evaluate the data to understand what the market is doing and why some locations are holding strong in the luxury market.
1. Examine the 13-month trends
This month’s report showcases comparative data on the top residential markets throughout Canada and the United States. When you’re looking at 13-month trends, there are three key areas to examine:
- Days on the market: This will give you an idea of the demand at each price point.
- Price per square foot: Compare the median price in each market you’re examining, in addition to overall national trends.
- Sales price versus listing price: The listing price doesn’t give you an idea of the true value of a home in the market, which is why you need to compare what homes actually sold for in addition to their listing prices.
2. Consider which niches are providing opportunity
Once you’ve become familiar with the 13-month trends it’s then time to understand specific niches that stand out in that data and show places where there might be opportunity.
Current data shows that property in Detroit, Raleigh-Durham and Las Vegas, as well as condo markets in Nashville and Washington D.C. are seeing growth. One reason for this could be that buyers in these areas are looking for a trifecta of lifestyle, affordability and financial opportunity.
Those aren’t the only areas that are seeing the same trends. When reviewing the markets highlighted in this month’s Luxury Market Report, it becomes very obvious that consumer behaviors such as moving away from high tax markets and downsizing are setting new expectations in demand. These particular locations are seeing growth because of this niche of consumers.
Our monthly report indicates exactly what the listing and sales statistics are in these markets so buyers and sellers can react to these changes appropriately.
3. How are national trends changing specific markets?
The last way to interpret national luxury housing statistics is to ask “what national trends are influencing these markets?” That can help give answers as to why certain areas are seeing growth in a transitional market.
For example, Boulder and Denver are currently seeing growth, while many major markets in North America are slowing. This could largely be due to the fact that the area is becoming a growing tech hotspot. With easy access to recreation and higher paying jobs, the area is becoming highly desirable to relocate to. Lower inventory at the moment is contributing to higher demand.
Just how high is this demand? In the example above, the report indicates that the median sold price for property was $1.6 million with just 73 days on the market, giving it the status of a “seller’s” market. This represents one of the very few seller’s markets in the country.
If you’re examining an area that you think might be impacted by a national trend, the best way to confirm your hunch is by checking its status in the Luxury Market Report. You can view the new listings, what’s sold, how many days a property stays on the market and the listing and sale price. The area will also be designated as a buyer’s, seller’s or balanced market.
The importance of recognizing trends
No matter what market you are located in, the secret to successfully negotiating is to recognize trends and leverage them. The only way to back up any hypothesis you might have about current trends is to review the data and use it as a tool to give you firm numbers with which to give you negotiating power.
For more information as well as key facts and figures about the current state of the luxury market, click here to check out our digital Luxury Market Report for North America.
Members of The Institute have access to download the full report which also includes monthly reports about luxury markets in over 55 cities in North America – by clicking here and using their membership login.
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