Luxury real estate is winning the race to recovery. Real estate expert Robert Frank from CNBC recently reported that the real estate market seems to have split in two. As wealthy investors and homebuyers are driving up prices and stability in the high-end market, the rest of the housing market is struggling at a slower speed.
According to Altos Research, Prices are up 10 percent and inventory is down 10 percent in markets where the median home price starts at $1 million. In the ultra high-end market where the median price is $10 million or more, prices are up 13 percent and inventory is down 11 percent.
As CEO of Altos Michael Simonsen told CNBC, ”It’s become a tale of two markets. At the high end, well-financed people have taken advantage of cheap money. And demand is up, inventory is down and prices are responding.”
There are many factors stimulating the growth of the top sector of the real estate market. First of all, the wealthy are opting to invest in fewer stocks due to the volatility of the European markets. Instead, they are taking advantage of historically low mortgage rates and investing in real estate assets. Foreign buyers from Asia, Russia and Latin America are also contributing to the decreased inventory of real estate in the most sought after U.S. neighborhoods.
To read more about this “tale of two markets,” visit Frank’s article from CNBC.com.
The Bradbury Estate listed at $78,800,000 with Hurwitz James Company.
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