You may currently think that entering the luxury market is an intimidating process to enter, but there are actually many long-term benefits with entering this market. Despite what many people say about this market, statistics show that the luxury market is more stable than you may think.
One of the main reasons buying luxury is a great option is because of the seasonal shifts that affect inventory in the market. The time when this is most significant is from winter to spring. This is because inventory still remains in winter destinations and new inventory arises onto the market to anticipate the spring rush. In the course of one year, inventory typically fluctuates by about 8,900 units. But, by understanding the big-pictre shifts it gives you more ability to predict what is to come in the luxury housing market.
In addition, median price points need to be considered. Median price points are helpful when trying to determine how the market is doing. The median list price determined in February 2019 was $1,000,000 for single family homes. However, for median luxury homes the price was $1,396,250. According to this information, this is about a $20,000 decrease from January. The gap between the sales price and list price for single-family homes is also widening. In February 2019, the median list price was $1,692,000 which shows that homes are now selling for an average of about 97 percent of the list price.
Another reason you should consider entering the luxury market is because of the review days on the market. The term “days on market” refers to the number of days that a home is available on the market before a purchase offer is accepted. The reason this information is helpful is because it shows what the demand is in a certain area and if homes are priced correctly for the market. So far the market has maintained normalcy but there is an increasing amount of inventory which has caused a shift from a seller’s to a buyer’s market.