With Terry Story, 27-year veteran Real Estate Agent with Coldwell Banker in Boca Raton, FL
Terry Story always reminds us that all real estate is local and so even when talking about high-end housing, the luxury market, it’s no different.
Since February 7, the number of luxury homes for sale in our area (those priced between 1 to 2 million) jumped from 7 to 18, that’s over 100 % increase, but there has been only one sale during that period. So clearly there’s a stall at that level.
The median price here in South Florida is in the $500,000 range, which is over double the median price nationwide. This is the range of the move-up buyer, the executive type buyer, the relocation buyer, and these homes were moving up until late 2015. Then sellers began to hear that the market was going up 3 to 4%, and they then began to price their homes accordingly, causing another stall at this level. Terry thinks the buyers are actually there, but they're just waiting for the sellers to become more realistic with their pricing so inventory can start moving again. The irony here is that interest rates are lower today than back at the beginning of the year, and the market and the economy, in general, are doing well.
The main reason people are listing their homes right now is that they’re looking for larger or nicer homes—they’re moving up the ladder, as it were. These move-up buyers, says Terry, account for about 40% and then those relocating to other areas comes in at about 24%.
The remaining percentage can be attributed to retirement, change in marital status from death or divorce, and then those wanting to move to a better school district, which is always a factor.
We live in a mobile society in stark contrast to say 40 or 50 years ago when homes were, if not forever, at least, for most of one’s adult lifetime. Many of us move many times throughout our lives and that’s what makes the real estate world go round and round.
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Steve Pomeranz: It's time for Real Estate Roundup. This is the time every single week we get together with noted real estate agent, Terry Story. Terry is a 27-year veteran with Coldwell Banker located in Boca Raton, Florida. Welcome back to the show, Terry.
Terry Story: Thanks for having me, Steve.
Steve Pomeranz: The markets ebb, and the markets flow, and there are low priced and medium priced homes, but today I want to talk about what the luxury priced market is doing. It's not so healthy, is it?
Terry Story: You know, I mean everything is local. You have to look in your own local marketplace. What we've seen, Steve, since late 2015, there's been severe inventory woes. You can see this in Manhattan, West Village, or Beverly Hills in Los Angeles, where actually it's more of high levels of inventory. It's that old story, supply and demand. The inventory levels are rising, and when inventory rises, prices fall.
I can relate that to my own marketplace. I did a study the other day in an area that I sell a lot of. Interestingly enough, I noticed that the inventory since February was seven luxury homes for sale, non-waterfront homes, and that to today's date jumped up to 18. That's over a 100% increase in inventory. Interestingly enough, during that, however, many months, February through August, there's only been one sale. You've got to say to yourself, "All right, what's going on here?"
Steve Pomeranz: What are the general prices of these homes you're talking about?
Terry Story: This study that I did were homes priced from a million to two million. Our median market price, in this area, is in the 500 range. This is more than double the median priced homes. This is your typical move-up buyer, your executive type buyer, relocating buyers,