The Institute for Luxury Home Marketing recognizes the ongoing coronavirus pandemic and its effects both on human life and the economy as these impacts are being felt by every single individual.
Traditionally at this time, we would offer an in-depth report on the status of the luxury real estate market for the first quarter of the year and reviewing whether forecasts made at the end of 2019 and beginning of 2020 are being realized.
Indeed, in looking at the figures during the first quarter of 2020, the luxury market overall reported a strong start to the year. Even though the World Health Organization announced the global pandemic on March 11th, properties were still being bought and sold at an increasing rate until the
end of March, which typified a normal growth at the start of the spring market.
According to Realtor.com’s Chief Economist Danielle Hale, who stated during her recent interview with RIS Media, “A low interest rate environment combined with flourishing economy and recordsetting stock markets pushed luxury sales into the double digits for the first time as 2019 came to an end.”
By the end of 2019, million-dollar sales had increased by 11.4 percent year-over-year and the entry point for luxury increased 2.1 percent to $1.27 million. Hale recognized that this trend continued well in to March 2020, as buyers took advantage of the opportunity to lock in low rate mortgages,
as well as high levels of luxury inventory that gave them plenty of options.
At the end of the 1st Quarter 2020, the single-family luxury market numbers were trending upwards with median sale price increasing from $1.315 million at the close of December to $1.32 million in March. Equally, the sales price to list price ratio trended from 96.8% to 97.6% and average days on market dropped from 60 to 39 days.
In the attached market, the luxury market was also seeing growth with median sales price increasing from $912,500 in December to $923,500 in March. The sales price to list price ratio trended from 97.9% to 98.6% and average days on market dropped slightly from 44 to 42.
Since the last week of March, all indicators now show that the real estate market has started slowed down. Experts are predicting a 30-35% drop in inventory for April, compared to last year. However, currently there has been little signs of panic selling and property prices are remaining fairly steady.