OK Investors, is it time to look at the Luxury Market?

Attention K-Mart shoppers, err, Real Estate Investors it appears the Luxury Market is heating up.  Does that mean it’s time to jump in and start looking for some blue light specials? No doubt there’s some money to be made in big digit transactions but there also is a different type of buyer to deal with as well.  I’m very interested to hear about your experiences in this arena, good and bad.

Here’s the story from Bloomberg:

Luxury Homes Spur Bidding Wars in L.A. as Market Rebounds

A week after Christine Lynch listed her house in the Brentwood neighborhood of Los Angeles for $3.625 million, she had seven offers. Within 10 days, a deal was reached for the five-bedroom, six-bathroom home — and for $225,000 more than she asked.

“My first reaction was, ‘Wow, I guess we’re really doing this,’” Lynch, 55, said in an interview. The all-cash transaction was completed on April 23. “I was really surprised by this level of interest and how quickly it sold,” she said.

Bidding wars are breaking out for luxury homes in such wealthy Los Angeles enclaves as Brentwood, Beverly Hills and Bel Air as an increasing number of buyers bet on rising home prices and investors return to the market. Even properties in need of extensive renovation are being fought over by shoppers who expect to resell them for more after a remodel or rebuild.

“The percentage of people who think prices are only going to go up is the greatest I have ever seen in my career,” said Syd Leibovitch, president of Rodeo Realty Inc. in Beverly Hills.

Sales of Beverly Hills homes priced at $2 million and higher climbed 11 percent in the first quarter from a year earlier to 39, according to DataQuick, a San Diego-based provider of property information. In Brentwood, whose residents include actress and singer Julie Andrews, they increased 56 percent to 25, and in Malibu they gained 64 percent to 23.

Throughout the U.S., residential-property sales of $1 million and higher rose 7.2 percent in March, the most recent month for which figures are available, from a year earlier, according to the Chicago-based National Association of Realtors, whose price categories stop at that amount.

Across U.S.

Demand has been rising for high-end homes in the northeastern U.S., including Boston and New York; on the California coast; and in parts of the southern U.S. amid a recovery in financial markets, according to Paul Bishop, vice president of research at the Realtors group.

Click the article title for a link to the full story.

Larry InDeed



Echo Boomers weigh heavily on US Housing Future

Well here some more economic tea leaf readers weighing in on the future of US Housing Markets.  Like everything in life, take it all in but don’t just accept it because somebody said so…especially economists.  You know you can get statistics to prove what ever you want, it’s all a matter of what you present and how you frame it.

I do agree there will be a near term increase in the demand for rental housing due to a number of factors.  There’s even schools of thought saying today’s college grads and young professionals are even less likely to want to own a home in order to stay upwardly mobile as they will change jobs and careers many times….  There’s some validity to that thought too.

The story comes from University and NAR’s economists at a recent Trade Expo.  Remember, always follow the money to see the motivation for (influence on) a story.  It is very interesting to note their 2011 Profile of Home Buyer’s shows those age 18-34 represent 31 percent of all recent home purchases.  Can you imagine being 18 or 22 and buying a house at todays interest rates…now that’s smart, especially if you can qualify for financing.

Future of U.S. Housing Markets Depends Largely on Echo Boomers

WASHINGTON (May 18, 2012) – The next two decades in housing markets depends largely on the Echo Boomers. That’s according to panelists at the “Shifting Demographics and Housing Choice: A Whole New World?” session today during the Realtors® 2012 Midyear Legislative Meetings & Trade Expo here.

There are approximately 62 million echo boomers in the U.S. Also called “millennials,” echo boomers are currently ages 17-31. According to the 2011 National Association of Realtors® Profile of Home Buyers and Sellers, younger home buyers – those ages 18-34 – represent 31 percent of all recent home purchases.

“We know that although many young people may be delaying home purchases in today’s economic climate, most of them still aspire to homeownership,” said NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami. “Realtors® are committed to ensuring that the dream of homeownership can become a reality for generations of Americans to come.”


I find it funny that the NAR President who also happens to be a Real Estate broker knows so much about young peoples desires…hmmm.

Here’s the link to the full story on the NAR site.

This quote also has some strong correlation to economist Harry Dent’s thinking in his book “The Great Depression Ahead.”  Demographics are important: Think supply & demand, peak earning years, getting married & starting families, retirement, etc.  Age correlates to economics.




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