The Luxury Market is Bouncing Back

1067 Emigrant Creek Road Ashland, OR 97520
Listed by Alan DeVries | Offered at $4,500,000 | MLS# 103010485

From housingwire.com

With the rising home prices, it seems that luxury homes are bouncing back as homebuyers returned to the market in full force in May.

According to realtor.com’s Luxury Housing Report released on Thursday, the luxury market outpaced the rest of the housing market in both price growth and views.

Luxury home sellers returned to the market with new listings of homes priced above $1 million, dropped by 15.1% year over year in May, compared to 57.8% in April. This means that luxury home new listings were still reduced, but to a lesser degree than the month prior. However, like the rest of the market, low inventory is the biggest challenge for these homebuyers.

Chief Economist, Danielle Hale, says the luxury market is leading the recovery. Stay at home and social distancing orders made ‘extra space’ even more relevant. This leads high-end buyers to find a second home that is within driving distance from their primary residence.

Only 25 of the 94 luxury markets tracked by realtor.com showed listing price growth since January. The pandemic has also slowed price growth in the luxury market, which had increased by 15% at the beginning of the year.

Zillow said new listings of higher-end homes dropped by 46%, while the less expensive homes are reduced by 32%. In response to the pandemic, new listings of the most expensive homes were the first to drop below 2019 levels, while cheaper listings fell over a week later.

According to realtor.com, luxury listing price entry points reached $2.97 million in May despite a small pace of growth. This is up 0.5% from April and 6.1% year over year.

As Hale said, it’s the luxury market that led the housing market’s median price growth, which was up 1.6% in May year over year.

After falling 9.5% year over year in April, searches for million-dollar homes grew 7.3% year over year. This topped the 6.2% growth that we saw before the pandemic slowed things down.

Not only are luxury listings seeing more viewers, but popular second-home markets are seeing the love, too.

Full details on housingwire.com


‘Housing Construction Has Turned A Corner’: Starts, Permits Rise In Latest Data

19349 Outrider Loop, Bend, OR 97702
Listed by The Ladd Group | Offered at $949,000 | MLS# 220102874

From forbes.com

As Covid-19 caused cities and businesses to shut down operations, new home constructions were also put to a pause in the previous months.

Fortunately, those days are almost over as the Census Bureau has released data last June 17th showing that the housing starts have increased by 4.3% in May, with 934,000 new starts recorded for the month. Building permits also rose to 14.4% over April. Single-family permits also jumped by 11.9%.

This bodes well for the supply-strapped housing market but this is not a quick relief. It usually takes about 8 months for a permit to become a housing completion or a finished property ready for sale. This means that buyers won’t see the outcome from the production in May until early next year.

Fannie Mae’s chief economist says the Census Bureau report was weaker than expected but it seems that the housing construction has already turned a corner. Single-family starts should see a stronger June due to the limited housing supply and record-low mortgage rates, which have sent applications to purchase a home rising for the last nine weeks straight.

The rising buyer demand should also inspire builders. A data released by Redfin earlier this week shows that homebuying demand increases by 25% over pre-pandemic levels.

The latest data from the National Association of Home Builders proves as much. Based on their latest survey, builder confidence jumped from 21 points to 58 this week. Anything over 50 indicates general optimism among builders. Their chief economist said that as the nation reopens, the housing is currently well-positioned to lead the economy forward.

Full details on forbes.com