The real-estate market is splitting in two, with wealthy buyers driving stronger growth at the top while the rest of the market continues to struggle.
From $16 million log mansions in Aspen to $90 million glass-walled penthouses in Manhattan, high-end real estate is defying the broader real-estate slump and weak financial markets. In local real-estate markets with a median home price of $1 million or more, prices are up more than 10 percent year over year, and inventory is down 10 percent, according to Altos Research , the real-estate analytics firms.
Hyper-wealthy markets are doing even better. In markets with a median home price of $10 million or more, prices are up 13 percent or more. The absorption rate – the rate at which inventory is drawn down – has sped up by 11 percent this year, according to Altos.
The growth is being fueled by several factors. Wealthy buyers with good credit can take advantage of today’s historically low mortgage rates. Volatile financial markets and the Euro crisis have scared the wealthy away from stocks and sent them searching for hard assets, like real-estate and collectibles.
At the same time, the newly rich in Latin America, Russia and Asia have begun snapping up properties in America’s most exclusive buildings and neighborhoods.Page 1 of 3 | Next Page