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High-end home market slows at greater rate than market as a whole. Trying to sell a high-end home in the current market often isn’t a luxurious experience. Sales of second homes and luxury homes have slowed at a greater rate than the market as a whole during the past 12 months. While sales trends are expected to level off in the near future, some say the current sales pace will be in place for the foreseeable future.
High-end home market slows at greater rate than market as a whole. Trying to sell a high-end home in the current market often isn’t a luxurious experience. Sales of second homes and luxury homes have slowed at a greater rate than the market as a whole during the past 12 months. While sales trends are expected to level off in the near future, some say the current sales pace will be in place for the foreseeable future. “We’re in the third inning of a nine-inning game,” says Bill Fanning, broker of Century 21 Beutler-Waterfront. In the Spokane area, a luxury home is considered anything that has a price point of $500,000 or more. Through June 16 of this year, 76 properties priced at $500,000 or more had sold in the Spokane area, according to Spokane Multiple Listing Service statistics. That’s almost half the number of high-end homes sales reported during the same period in 2007, before the current downturn had started. From Jan. 1 to June 16, 2007, 147 homes sold for $500,000 or more. Pam Fredrick, designated broker of John L. Scott South East, in Liberty Lake, says, “That’s way down from where we usually are, but it’s a lot better than a lot of consumers and agents think.” When the price point is raised, however, the change becomes more pronounced. From the beginning of the year to June 16, eight homes sold for $800,000 or more, according to MLS statistics. That’s less than a third of the sales during the year-earlier period, when 27 homes sold in that price range. The story in the waterfront-property market is similar. According to Coeur d’Alene MLS statistics, 13 waterfront properties in Kootenai County had sold through June 17 of this year, which is down from 41 waterfront sales in the year-earlier period. As of this June 17, 14 waterfront properties had pending sales that hadn’t been completed, or closed, yet. That’s about a third of the number of pending deals reported through the MLS in the year-earlier period. “That shows you the trend isn’t going to change soon,” Fanning says. Nancy Wynia, associate broker at Windermere/Manito LLC, says sales have slowed but that people who come from larger metropolitan areas are surprised at how much farther their housing dollar goes in the Inland Northwest. In other words, $500,000 in Spokane buys substantially more home than it does in most California communities. But a dearth of out-of-state buyers accounts for part of the slowdown in the Inland Northwest’s home-sales market overall but particularly in the luxury market. Real estate markets in California and other states have slowed substantially more than they have in the Inland Northwest, which means fewer people are able to sell their homes elsewhere and buy something here. “We aren’t seeing an influx of people coming in,” Fredrick says. Also, she says, a tighter lending market has made it more difficult for buyers to secure jumbo loans, which is a loan for an amount that exceeds industry standards for conventional loan limits. In the current market, luxury-home experts have advice for buyers and sellers alike. For sellers:- Make sure the property is priced properly. Homes that aren’t priced competitively are less likely to get looks, much less offers.
- In the market that was hot, we could overprice and still get lookers,” Fredrick says. “That is not the case now.”
- Stage the home. Remove clutter, unique personal items that might not appeal to others, and arrange furniture to make rooms feel big but not empty.
- Market professionally. Have professional photos taken and placed on flyers and Web sites. Fredrick says 78 percent of buyers initially find the property they end up purchasing through Web searches, so photos need to stand out in order to pique interest.
For buyers:The advice varies a bit. Fredrick says to make sure offers are realistic. Sellers are motivated to sell, but they aren’t going to give a property away. Fanning says, however, that in waterfront properties sellers typically aren’t eager to drop prices substantially, even though they would accept an offer that’s lower than the listing price in some instances. “If I were a buyer, I would not be afraid to make offers,” Fanning says. “They think they are wasting their time by making a low offer, but they might not be.”
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