Rich People Buying Homes Again -- Should You?
Wealthy people are buying homes as quickly as they can in traditionally hot cities, according to Christie's International "The confidence is back in the market," said Christie's CEO Neil Palmer. "This money naturally finds a home first at the top end of the real estate market."
Liquidity, he says, is coming back in the market, much of it in hard cash. And Christie's knows what it's talking about: The average list price on its homes runs $3.5 million, and the company has 475 listings across the globe valued at more than $10 million.
"It's the new financial psychology," says Jarvis Slade, Jr., Christie's managing director for the Americas. "We've had two years of hesitation, the sellers are realistic, the buyers confident and cautious, but Americans are starting to feel better."
Slade's backyard, Manhattan, is on fire, he says, with 18 percent appreciation in certain segments. New York City is always a bellwether, but it could soon be surpassed by Hong Kong second homes in Hong Kong for escape, "just in case." London, New York, Paris and Monaco real estate values are also heading upward, benefiting from tensions in the Mideast.
"London's high end prices stalled from the fall of Lehman's to fourth quarter 2009," said Palmer. "Prices are just off 2007 peak pricing at this moment, and there is quite simply a lack of stock."
In the U.S., coastal markets are also experiencing a surge of foreign buyers in New York, Palm Beach and San Francisco. They are shrewd consumers and drive hard bargains, asking sometimes as much as 30 to 40 percent off a property.
Which makes them no different from Texans, who are also taking Texas-sized advantage of sellers' need to unload. Dallas broker Allie Beth Allman reported five offers on a recent deal.
Sellers have finally come to the realization that market won't get better, home prices won't appreciate, and prices are not moving up. In fact, they are happy to see them just not go down. The "new psychology" has helped boost Allman's sales by 10 percent this year alone, shedding 61 million dollar homes since January.
It's only April, but Allman says she has signed seven high-end home contracts in the last 10 days, and just listed the home of Dallas Cowboys head coach Jason Garrett for $1.95 million.
Candy is an award-winning, Dallas-based real estate reporter, blogger, and consultant. She's the gal who brought House Porn to the Bible Belt! Read more at SecondShelters.com. and send story ideas and tips to CandyEvans@secondshelters.com.
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