Selling any home is a challenge. That’s been especially true in 2014, a year in which the number or existing-home sales has fallen. And if you’re selling a high-end luxury home, one with a price tag higher than $1 million? Then selling your home is even more of a challenge. Luxury home sales peaked in late June but by the first of September the market crossed over into a buyers’ market for the first time since early spring, though not strongly so. Median luxury prices also have been falling since the end of June, according to weekly market reports from the Institute for Luxury Home Marketing.
Last week ILHM’s Market Action Index, which is calculated from active listing data from Altos Research, fell to 29. The Market Action Index measures available supply relative to the current level of demand. Index value above 30 indicates conditions favor the seller. The index reached a season-high of 31 in late June. Days on market also rose to 153 last week, the highest it has been since the end of March.
The total luxury inventory of 23,802 have stayed near 24,000 and have yet to decline significantly with the end of the sales season; strong inventories were a factor in the switch from a sellers’ to a buyers’ market. The ILHM Luxury Composite Price this week is $1,312,295, or an average asking price of $359 per square foot. With the end of the summer, more and more sellers are eager to sell. Price decreases rose to 38 percent of all listings and only 4 percent of current listings have raised their prices. Some 11 percent of currently luxury listings have been relisted.
The declining market activity is widespread. In 18 of the report’s 31 markets, activity was down in the first week of September. Only Chicago, New York, San Diego and Philadelphia reported market increases. Homes in the ILHM sample each week are on the market for at least $500,000 in the top 10 zip codes for 31 major metro markets around the country.