Real Estate & Area News
Luxury Housing Market Thriving Despite Struggles Seen on Lower End
The US housing recovery is under way, according to data released last week, but only the high end, as sales of luxury homes are rising while sales of lower priced homes are slow. According to the report, published earlier in the week by the National Association of Realtors, home purchases over $1 million rose 7.8 percent year-over-year in March. Over the same period, sales on the bottom slumped, with sales of homes for under $250,000 plunging 12 percent from a year earlier. This part of the market accounts for nearly two-thirds of the overall market, so a true recovery can't take place without cheaper homes being sold.
The marked improvement in the luxury home market offers evidence of an improving economy and stock prices that have more than doubled since bottoming out in 2009. The seemingly contrary results on the lower end underscore the difficulties most Americans are still facing. While stocks have recovered, wage growth has been nearly non-existent in recent months and lenders are still holding to tight credit standards implemented during the recession. At the same time, investors have been snapping up discounted homes, driving supply down and prices up and effectively pulling the dream of homeownership out of reach for the lower class.
May 2, 2014