According to Maison Global, the publication focused on global top tier real estate owned by the Wall Street Journal, luxury home sales are likely to slow in 2019. Today’s economic cocktail of rising mortgage interest rates, this generation’s biggest rewrite of the tax code and stock market volatility and rapid home price growth began to cool in the second half of 2018. This is expected to continue through 2019, according to Realtor.com’s year-end report.
In the first 10 months of 2018, 100,500 homes sold for $1M or more across 85 luxury markets. This represents an increase of 10%. Luxury prices also hit new heights in Miami, Nashville and other parts of Florida. Williamson Tennessee, which includes Nashville, hit $1.052M in 2018 for the first time ever surpassing the $1M mark. Florida’s Sarasota saw second home prices jump almost 18%.
The above paragraph being said, there are clear signs of slowing as economic and political uncertainties creep into buyers’ psyches. Subdued sales in Manhattan, Los Angeles, China and Seattle are causing inventories to build up for the first time in 2 years. That inventory increase now stands at +16% compared to one year ago. And in Hawaii, the luxury home sales have dropped by nearly -20%, according to Realtor.com.
Denise Hale, economist with Realtor, said, “If the cost of living rises as a result of taxes, then you’ll see that (rise) reflected somewhere…whether that is just fewer home sales, less real estate activity or even less borrowing for home purchases.”
Low-tax, less-cost cities such as Williamson TN saw the volume of luxury home sales soar 55%. Colorado, North and South Carolina and Florida are predicted to see continued strength, according to the Realtor.com report. “These locales will attract demand from higher cost areas as luxury buyers reallocate their investments during the current and post tax season.”