Real Estate Remains Hot, Aside From the Luxury Market

Brainerd Lakes Real Estate Podcast with Chad Schwendeman

Current market conditions are favorable for certain buyers and sellers. Here are the latest details.

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The real estate market remains red-hot. In fact, Zillow estimates that homes sold more quickly in 2017 than ever before. 2018 seems on-pace to beat 2017. However, one segment of the real estate market seems to lag behind.
I’m talking about luxury homes.
Prices in the top 5% of the real estate market increased just 5.1% in 2017, almost 2% lower than the rest of the market. What's going on?
Affordability does not seem to be an issue. More Americans can afford a top-level home than ever before. Instead, it might come down to two other factors.
First, uncertainty surrounding the new tax bill could be affecting luxury homes more strongly, and this might be the reason why some potential buyers are choosing to sit and wait until the details of the tax plan become more clear.

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Demand and supply are more evenly matched
at the top of the market.

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Second, there is simply a greater supply of luxury homes compared to other types of homes. In fact, 53% of the available housing inventory is in the premium segment, compared to 23% for starter homes and 24% for trade-up homes.

In other words, demand and supply are more evenly matched at the top of the market, while in other segments, demand far outpaces supply. What does this mean for you?
If you've been thinking about trading up to a luxury home, now might be the ideal time to do so. With the lack of buyers in this price point, you may be able to get the very best deal for a luxury home that we’ve ever seen. The red-hot demand for starter and trade-up homes means you could sell your home for top dollar and at record speed. The limited price growth and greater inventory at the luxury end mean you could have your pick and find a special, unique, and customized home that perfectly suits your preferences.
If you have any questions about the current Baxter real estate market, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.