Residential real estate’s high end—including Houston’s luxury home market—was the subject of a thought-provoking assessment that appeared at week’s end. It was offered by Mansion Global—a Dow Jones publication that targets the international “high net worth audience.” Although at first blush the article, “No Immunity for Luxury Sector From Biggest Interest Rate for U.S. Since 1994” would seem to foretell stormy times, some of the supporting details pointed out what has often proved true in the past—that although some would-be buyers could be forced to the sidelines, at the top of the market, the future is more equivocal.
Points of interest:
• The Fed’s interest rate hike, while being the largest since 1994, “is likely to have more effect on the mainstream market.”
• Selling prices might be moderating, though not necessarily markedly. Sellers may become more flexible regarding amenities or closing costs. According to one Wells Fargo Wealth and Investment Management senior director, “We’re not seeing bargains in high-end real estate.”
• Following what had amounted to a market “frenzy, which was not sustainable,” less buying power at the fringes of the luxury market is actually “a good thing in the long run.” That’s because it will be accompanied by an uptick in listings which will lure back buyers “who dropped out of the market due to a lack of quality supply.”
• According to a report last Thursday, “inventory is already growing at a faster pace than predicted.”
Perhaps most intriguing were some concluding observations by NAR® Chief Economist Henry Yun. Since mortgage rates have already risen “far more than the Fed’s benchmark,” Mr. Yun thinks they may already have peaked—even if the Fed continues with a succession of further raises. What’s more, “to people with a longer historical perspective, 6% is still attractive.”
For participants in Houston’s luxury home market, an increase in the number of quality listings could benefit both the buyers who are drawn back and the sellers who benefit from a wider audience. Contact us for an up-to-the-moment reading on the latest local activity. Rinnovare Realty, LLC (832) 445-4957 or visit us at www.rinnovarerealty.com .
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Home » Houston’s Luxury Home Market after a “Frenzy”