Even in the luxury real estate market, where money is often not an object, the rising prices of homes across the nation are drastically affecting high-end buyers and sellers. According to the latest data from S&P/Case-Shiller, prices of sold homes across 20 major metropolitan areas were up by 10.8 percent in April year-over-year. However, in most luxury markets outside of Southern California home prices are having to come down in order to attract the right buyer.
Even in San Francisco, whose homes are the most sought after and where the real estate market is considered one of the strongest in the country, the highest of luxury homes are having to drastically reduce their prices in order to even attract potential sellers. On the prestigious Belvedere Island, just north of San Francisco, a multi-million dollar home has slashed its price not once but twice during the four-year spell in which the exquisitely cursed property has languished on the market. Originally listed for $27.5 million in May 2010, the six-bedroom, 9,415-square-foot home has reduced to a current asking value of $18.8 million.
While there were plenty of record-breaking, $100 million home sales this year, many of them occurred in the affluent parts of Southern California as the rest of the market has, unfortunately, languished along with the rest of the traditional housing market.
“The luxury market has always seen list prices that were set higher above actual market levels,” says Jonathan Miller, president of real estate appraisal and consulting firm Miller Samuel Inc, to Forbes. “The housing stock tends to be less homogeneous so it is higher to price and [has] longer marketing times. It also sees more price creep than most sectors–i.e. ‘The house down the street got $5 million, so my house that is half the size must be worth at least $4 million.’”
Beverly Hills Homes Remain Works of Art
For the extreme high ends of the market, however, the high-rate of customization and eclecticism that goes into these homes takes a special type of buyer to invest.
”The upper end is going to look at their property [as] a one-of-a-kind piece of artwork,” explained Ken DeLeon, a luxury broker in Palo Alto, to Forbes. “You’re more inclined to see people try a bold number, a big number, to start. And when that fails, you have to kind of get more realistic …It’s no longer a Rembrandt, it’s just a home.”
One area of the country that has been driving the luxury home trend into positive numbers is in Southern California, where homes in neighborhoods such as Beverly Hills are maintaining a highly competitive home market. Demand for homes in Beverly Hills have driven inventory down, but allowed home prices to continue gaining.
Beverly Hills home prices have risen 20 percent over the last year, and given the exquisite state of these homes, are expected to continue rising in the near future.
If you are interested in Beverly Hills luxury homes, please contact our team of property experts today.