The Conservative Cave
Current Events => Economics => Topic started by: Ptarmigan on November 09, 2023, 09:32:51 PM
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How affluent homebuyers are keeping luxury real estate market afloat
https://creditnews.com/economy/how-affluent-homebuyers-are-keeping-luxury-real-estate-market-afloat/
Undaunted by rapidly rising mortgage rates, many rich Americans haven’t given up on their poolside pads and high-end condos just yet.
Luxury home prices climbed 9% to hit $1.1 million, the highest third-quarter level ever recorded, reports Redfin. That’s almost three times faster than the price growth of non-luxury homes, which made it to a median $340,000 in the third quarter.
And while the overall housing market has been cooling thanks to a dwindling supply of affordable properties and mounting rates on home loans, the market for homes in higher price tiers has been chugging along relatively well.
“Wealthy homebuyers have more tools to weather the storm of high mortgage rates,” says Redfin senior vice president of real estate operations Jason Aleem.
Of course, their most powerful tool comes down to bucketloads of cash.
House prices are high because of wealthy homebuyers. Of course that cannot last forever.
Experts say some wealthy buyers could start pulling back if affordability conditions don’t improve.
“While many luxury buyers have the resources to forge ahead even when mortgage rates are elevated, stubbornly high rates and home prices will likely push some affluent house hunters to the sidelines in the coming months,” said Redfin chief economist Daryl Fairweather.
“High costs, along with the uptick in the number of high-end homes for sale, could cause luxury price growth to cool.”
And new construction could slow as well, with confidence among single-family homebuilders tumbling to a nine-month low in October due to ebbing demand, according to the National Association of Home Builders and Wells Fargo Housing Market Index.
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I don't think that house prices are high because of wealthy home buyers. Houses are high because demand is high and with high interest rates only the wealthy can afford them.
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Also the cost of materials has gone through the roof.
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I continue to get unwelcome texts and phone calls by some breathless schmuck who desperately wants to know if I'm interested in selling my house.
Not just "no", but "HELL NO!"
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I continue to get unwelcome texts and phone calls by some breathless schmuck who desperately wants to know if I'm interested in selling my house.
Not just "no", but "HELL NO!"
As I like to say, "Which part of 'NO' do you not understand? The 'N', or the 'O'?".
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Takes longer to build houses on top of the material costs.