Death of the San Diego Luxury Homes Market
With all the buzz about home sales in San Diego picking up, everyone has forgotten about the luxury market. There is a huge dichotomy between
lower and higher priced market segments. In the luxury market, there are more homes for sale, less homes selling, more price reductions, more
properties going off market without selling and more bank-owned and short-pay deals.
The number of homes for sale over $2million has increased significantly. With prices in lower price ranges having dropped considerably over recent
years, the gap between the first-time buyer areas and the luxury market has become huge. Search San Diego homes for sale to see for yourself.
Partial cause for the rise in homes on market is that there are very few sales occurring. While you cannot find a good online source for sold data, I
have provided one for you in Mission Hills. If you visit my Mission Hills real estate website, you will see statistics outlying how sales over $1.4m have
dropped significantly in the past 2 years.
Due to the buildup of inventory and lack of sales, we are seeing a resulting drop in home values in luxury markets. It's a very simple supply vs.
With very few homes selling, many listings are hitting their expiration dates and coming off market. When this happens, the seller has the option to
relist with their old broker, try a new one, or simply not list their home anymore. In some cases, the homeowner is unable to go any lower on price
without turning their sale into a short-pay. In this instance, if there is not a financial hardship, the bank will not allow a short-pay.
We are seeing more and more financial hardships for homeowners in the luxury market. With the economy down, many CEO?s and business owners
are finding their earnings cut significantly. With a concurrent drop in prices, there is little equity for some to sell their home without bank approval. We
are now beginning to see short-sales and bank-owned homes in the San Diego luxury market.
As you can see, the news for homeowners in our luxury markets is not good. Very few homes are selling unless there is a must-sell scenario. It will be
these must sell scenarios that will continue to drive the prices down over the next 6-12 months.
About the Author
Adam is a San Diego luxury specialist & marketing master. View a complete list of all San Diego homes for sale at his website or contact Adam for all
your real estate needs.