Luxury Home Market in America is Boosting Economic Recover
Demand for big-ticket second homes is propping up the housing sector of the economy, according to the National Association of Realtors (NAR). Stay-at-home orders and social distancing have put a new value on extra space, which is also true for the luxury market. There is a renewed interest from high-end buyers to find a second home that is within driving distance from their primary residence.
In such places as the Hamptons in New York, Palm Springs in California, Greenwich, Connecticut and others places, such as Colorado’s high country resort communities, the demand among affluent second-home buyers started to soar this spring.
Price growth and demand for the luxury market, defined as the top five percent of homes, outpaced the rest of the sector in May, and currently the demand for big-ticket homes is now growing at a faster rate than it was prior to the pandemic. Searches for high-end properties grew 7.3 percent year-over-year, according to a June report, outpacing the 6.2 percent growth recorded pre-coronavirus.
Though price growth is slowing, median prices grew 1.6 percent annually, a higher rate than any other price bracket, and the entry point to luxury reached $2.97 million in May, up 0.5 percent from April. The Covid-19 pandemic has reinforced the resilience of the housing market, and unlike prior downturns, the luxury market is leading the recovery.
In Colorado, Summit County real estate prices have soared during the pandemic crisis. A single-family home in Summit County in August averaged just over $1.4 million, but you can save almost a million dollars by buying a home in Park County and still be able to drive over the pass to Breckenridge, says one mountain Realtor.
Overall, the total for all residential real estate in Summit County has been about 90 days on the market, but depending on the neighborhood, the home is gone nearly minutes after it hits the market.