The real estate market remains red-hot. In fact, Zillow estimates that homes sold more quickly in 2017 than ever before. And 2018 seems on-pace to beat 2017. However, one segment of the real estate market seems to be lagging.
I’m talking about luxury homes.
Prices in the top 5% of the real estate market increased just 5.1% in 2017, almost 2% lower than the rest of the market. What's going on?
Affordability does not seem to be an issue: more Americans can afford a top-level home than ever before. Instead, it might come down to two other factors.
Demand and supply are more evenly matched at the top of the market.
First, uncertainty surrounding the new tax bill could be affecting luxury homes more strongly, and this might be the reason why some potential buyers are choosing to sit and wait until the details of the tax plan become more clear. Second, there is simply a greater supply of luxury homes compared to other types of homes.
In other words, demand and supply are more evenly matched at the top of the market, while in other segments, demand far outstrips supply.
If you've been thinking about trading up to a luxury home, now might be the perfect time to do so. The red-hot demand for starter and trade-up homes means you could sell your home for top dollar and at record speed. The limited price growth and greater inventory at the luxury end means you could have your pick, and find a special, unique, and customized home that perfectly suits your preferences.
If you have any questions about the current Central Illinois real estate market, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.
