The State of The Luxury Housing Market in Rancho Santa Fe

You may have heard that the housing market has improved and that number of units sold and/or prices have increased.  Most of that movement has been in the price range of $600,000 and under. The activity has been fueled by government backed loans and the tax credits which have been extended into next year.  I recently had a buyer in that price range and they had to write numerous offers before one was accepted and many of the properties they made offers on ended up selling above list price.
That is not the norm in the luxury market.  In an article from The San Diego Business Journal (link below) Lucy Kelts and other Realtors in the San Diego luxury market, state that although the number of units sold in a month compared to the same month last year have increased slightly the median home price continues to decline.  This is due to various factors but the three that all seem to agree upon are:
1) Distressed properties continue to pull down luxury home prices
2) Jumbo loans have been very hard if not impossible to get
3) Cash is king and expediency queen in the luxury market
I added number 3 and maybe it is not a reason as to why median home prices are declining but maybe it is.  A seller often times will accept a lower price if it is an all cash offer with a quick close because it is a deal that is more likely to close and close on time. Saving them another  month, or more, of carry costs.
The take away from this, I believe, is captured by Lucy Kelts in the last line of the article (link below) from The San Diego Business Journal……..”When the new construction and distressed properties get absorbed, there will be no more opportunities.”
To read the article click on the link below.
CLICK HERE  Luxury Home Sales

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