Key Highlights
- COVID pandemic is and will continue to be game changer for all including the wealthiest individuals and markets
- Lenders have changed their qualifying criteria
- Fallout from pandemic to linger
- Luxury listings moving more slowly now
- May or may not be indicator for luxury home markets BUT Neiman Marcus just filed for bankruptcy
Danielle Hale, realtor.com economist, wrote in a recent report, “Like the US economy, luxury housing isn’t immune to the impacts both short and long-term of COVID-19. Many of the gains made in the luxury market in the fourth quarter could be erased as buyers are asked to stay home and sellers hunker down. It’s pretty clear that COVID-19 is going to have far reaching consequences both in the US and globally, the question that remains is just how much of an impact it will have.”
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Inman highlighted five different counties with high concentrations of wealth as well as regional diversity to get a “snapshot” of how the pandemic may affect these five different luxury home markets. These five counties are…
- Nassau County in NY – “old money” blue bloods
- Collin County in TX – younger, more suburban wealth
- Loudoun County in VA – government and political workers
- Marin County in CA – technology driven households
- Summit County in UT – second home buyers
The California Association of Realtors indicated that active listings in Marin County as of March 1 dropped approximately 44% y/y. Also in March, the median sale price in Marin was just under $1.4M, an increase of +2.1% compared to February and +5.8% y/y. Sales were up +50% in March compared to February but down -12.2% y/y. Wes Mayne, an agent with Coldwell Banker, believes that under all circumstances, home prices will not be discounted.
Loudoun County, part of the Washington DC metro area, saw its median sold price increase +13.48% y/y in March to $534,500, according to Bright MLS. Active listings fell -25% y/y BUT new listings were up +9.8%. The county has seen rapid growth in its suburbs due primarily to government and technology jobs. Tania Gonda, a broker with Weichert Realtors, “We are doing business and we’re taking listings. We’re signing up buyers and just getting it done. Just not in the volumes we normally have.”
Kevin Leatherman, owner of Letherman Homes in Nassau County, said, “We’re going to be navigating the disruption of this (COVID pandemic) for a year…the market…is one step above nonexistent (and) the luxury market…is probably the slowest out of everything.” Nassau County like New York City has been hurt hard by the pandemic. According to the New York State Association of Realtors, new listings dropped nearly -30% y/y and sales fell by nearly -24% y/y in March. The median sales price of a home was $530,000, +2.9% y/y.
In Summit County, primarily known for Park City, the Sundance Film Festival, and fluffy, powdery, perfect snow that draws skiers from all over the world, the median listing price of a home in April just topped $1M, a more than +21% increase y/y and nearly +50% compared to March of 2020. Active listings dropped approximately -16% y/y and -2.5% from March 2020. Drew Via, an agent with KW Park City, said, “We’re still seeing transactions, just at a lower percentage. It’s pretty slow this time of the year anyway.”
Collin County is just north of Dallas has just over 1M people due to rapid growth from many, many well paying jobs and large corporations. According to Texas Realtors data, closed sales increased by +3.2% y/y while listings fell -27.9% y/y. The median sales price was $345,000, an increase of +3% y/y. According to Compass broker Christopher Ohlig, “The buyers are still hungry, there’s just not enough listings…It hasn’t really slowed down and I think because of that the over all feeling I’m getting from people is that they’re good.”
Thanks to InmanNews’ Jim Dalrymple II.
Also read: Foreclosure Activity Down to 15-Year Low in 2019, Markets That Changed The Most This Decade, #CancelRent Is Rallying Cry for Tenants
