The housing market is hot, with prices rising as demand far outpaces supply in almost every region. However, when it comes to luxury real estate, things are quite different. In the upper-end market, inventory is plentiful in most locations.
For that reason, prices haven’t skyrocketed as they have in the lower and mid-tier markets. This, coupled with sensational mortgage rates, means that this may be the perfect time to purchase the luxury property you have always desired.
Let’s break it down into the three major reasons to act now:
1. There are more homes from which to choose
According to a recent Wall Street Journal article, inventory in the upper end is increasing, while it is decreasing at the lower and mid-tier price ranges. Here is a graph showing the average increase/decrease in inventory for the first four months of this year as compared to last year:
2. Prices are becoming more reasonable
In a separate article, the Wall Street Journal also talked about prices in the luxury market. They explained that downward price adjustments have been more common in the luxury market than in markets with lower prices. They went on to say:
“The growing number of price cuts suggests luxury-home sellers are becoming more realistic about property values as sales have slowed, said several real-estate veterans.”
Not only will you have more to choose from, but you may also be able to get the property at a reduced price.
3. Mortgage rates are at historic lows
In the past, one of the drawbacks to purchasing a luxury property was the larger mortgage rate on “jumbo” loans which are often required on high end properties.
However, HSH.com just revealed that jumbo rates just set new record lows:
“While conforming fixed-rate mortgages eased a little this week, 30-year fixed-rate jumbos declined enough to break into new record low territory (3.66%), besting the previous low set in April by two basis points.”
Bottom Line
More choices, better prices and historically low mortgage rates may make this the perfect time for you to own one of those luxury properties you and your family have always fantasized about.
I didn’t realize that mortgage rates were so low especially on high end properties. We have been looking to invest in a luxury property out of state where we could live in the summer. I really think real estate is a safe investment.
That’s really neat that the prices for the homes are going down. My husband and I want to get a really nice house that’ll go along with our high-end lifestyle. We’ll have to find some luxury homes to look at.
My husband and I have been thinking about buying a new home. I appreciate your advice that we will have more to choose from, but also that we’ll be able to get the property at a reduced price. This is great news because we are in the market!
My wife and I are thinking about buying a new home this year, so thanks for sharing this. I had no idea that mortgage rates are historically low. I will have to see if we can take advantage of these low rates while they last.
I liked what you said about the prices being more reasonable right now. My uncle is thinking about buying a luxury home since he just came into a lot of money. I think that it’s really smart for him to be looking now, based on the trend for the prices.
I think it’s great that you talked about how prices are becoming more reasonable for luxury homes! I wonder if that is based on location because I’m curious if that is the same in my area. I will have to ask a professional. Thank you for your reasons to buy a luxury home.
My wife and I want to buy a new home next year, so thanks for sharing this. I like your point about how mortgage rates are historically low right now. We’ll have to take advantage of this and find a home that we can live in for a long time.
I’ve been hoping to be able to purchase and move into a luxury home soon, and from your description of the market trends, sooner may be better than later. Being able to have lots of options is important, because I have very specific ideas about what I’m looking for in a luxury home (a pool is an absolute must,) so it’s good to know that the options have been increasing at the same time that the costs have been decreasing. While the money isn’t really an issue for me right now, it’s always good to get a discount where you can, and having a low-price high-volume market is definitely good for me as a consumer.
Thanks for explaining some benefits to buying a luxury property. It’s good to know that downward price adjustments have become more common when it comes to the luxury market. That said, it’s probably important to look at the luxury market in your area to better understand what the price adjustments are like locally.
You convinced me to buy luxury property from the neighboring community because there are now more homes to choose from. If the prices are becoming more reasonable as well, I should not pass this opportunity at all and hire a real estate agent to help me. I think it should be something I’ll be doing soon because mortgage rates are at historic lows so I’ll consider hiring someone to help me buy the luxury property of my dreams.