Homes & Estates Florida Portfolio Volume 2 | Page 7

1
THE NEW NORMAL
In many Power Markets, the record-breaking price increases of the
last few years leveled off to more historically sustainable rates of
growth in 2017. Inventory of single-family detached luxury product
rose 30% last year, compared to 2016. However, the traditional
build-up of new luxury listings followed expected historical patterns,
with the highest inventory available in July and August and a gradual
decrease as the year wound down.
The overall median luxury sales price of single-family detached
homes decreased slightly from the previous time last year, but
the price increased as much as 10% over the median luxury sales
price of $1.5 million during 2017. The median luxury sales price of
condos remained constant at approximately $700,000 throughout
much of 2017. There was also a decrease of sold luxury single-
family detached homes in 2017 as compared with 2016. However,
the market trend of more sales occurring between the months of
April and June remained consistent with historical trends. On the
luxury condo side, the number of sold units notched downward,
but only slightly. Median days on market for single-family-detached
homes also increased to 40–45 days, from 35–40 in 2016. One
area of strength was the sales-price-to-list-price ratios for luxury
single-family detached properties, which rose modestly to 98% in
2017 as compared with 97% in 2016. While that may not seem
significant, the dollar amount of a 1% price difference can be quite
meaningful to a purchaser of a million-dollar home. Diane Hartley,
general manager for The Institute for Luxury Home Marketing, views
these metrics as an indication that the high-end residential sector is
settling into a “new normal.”
“The luxury real estate market led the general housing market out
of the global recession, and during that explosive upswing, we saw
some of the largest year-over-year price gains ever,” she says. “Now
we are simply seeing a return to a more typical pricing and sales
paradigm — especially for single-family detached properties.”
2
POWER MARKETS 2.0
Second-tier Power Markets — which we identified as a trend
earlier last year — continued to make a strong showing in 2017.
For example, Austin, Dallas, Atlanta and Montgomery County
just outside of Washington, D.C. all had shorter median days on
market in 2017 than in 2016. Other fast-selling non-traditional luxury
marketplaces included Seattle, Silicon Valley, Raleigh-Durham and
Fairfax County, also near D.C. While California has dominated the
“most expensive” lists for several years, one surprise Golden State
market was Sacramento, which posted a sales-price-to-list-price
ratio of 104% in 2017. In another surprise, Denver saw median
single-family detached home prices rise from $790,000 to $870,000
in 2017. Days on market also remained constant at around 25 to
30 days, and the sales-price-to-list-price ratio remained at 98.5%.
“This makes sense as high-net-worth money moves from more
expensive cities to markets wi th lower luxury median home prices,”
says Craig Hogan, vice president of luxury for Coldwell Banker Real
Estate LLC. “Investors are finding greater opportunity for returns. As
mobility and accessibility increase, too, affluent buyers are not just
making real estate decisions based on location anymore — lifestyle
is becoming a bigger factor in their moves.”
coldwellbankerluxury.com | 5