If Yahoo Finance’s take is correct, as residential real estate continues to revive after the economic shocks of the pandemic, high-end properties may be among the first to lead the recovery. For the owners of luxury homes in Dewey Beach, DE who thought twice about joining the Dewey Beach, DE listings, last month’s activity across the nation among seven- and eight-figure properties could provide the necessary encouragement.
Back in April, when real estate activity hit the brakes in reaction to uncertainty over the virus, Yahoo reports that online searches “for pricey pads” fell nearly 10% from the previous year. That was the good news—at least compared with how luxury home sellers reacted. In the same month, listings for homes priced in the top 5% nosedived by 57.8%!
Explanations for the turnaround were numerous and credible. One senior economist at Realtor.com zeroed in on a frequent human reaction. “After being cooped up in homes, luxury buyers…are looking for more space.” He pointed to New York State’s pricey Hamptons—which already in May reported a 72% increase over the previous year’s number of listings viewed.
As Forbes luxury reporter Dima Williams observed, not only was the segment recording a promising uptick in demand and inventory, but the entry prices were growing at a rate that eclipsed the rest of the market. Its year-over-year price rise of 6.1% made upscale housing the market leader. That is unlike previous market recoveries when luxury properties lagged behind other segments.
In a week that saw Wall Street falter, realtor.com’s director of research, Javier Vivas, saw a cause/effect relationship explaining data that showed luxury buyers “are returning in full force.” With confidence in the stock market waning, “Luxury buyers are seeing value in buying a second home as an investment and a getaway.”