As the inventory of luxury homes grows, potential buyers will have increased bargaining power
While the demand for entry-level and transition homes has gone through the roof with supply not standing a chance at keeping up, at the other end of the bracket the inventory of luxury homes has been steadily increasing.
In March, the supply of homes priced between $500,000 and $750,000 rose 15.9 percent year-over-year, The Wall Street Journal reports. The inventory for homes between $750,000 and $1 million saw an even bigger increase of 16.10 percent year-over-year for March. Homes over $1 million saw a large increase as well with a 12.60 percent year-over-year increase in March.
While people in lower price tiers, especially the entry-level, have been scratching and clawing to find homes in the current rugby scrum of a housing market, those with more money to spend are not only finding themselves with a large selection to choose from, but they are also able to leverage this surplus into better deals for themselves.
A big reason sales at the upper level have slowed recently is due to the volatility of the stock market. Wealthy buyers have become a little more cautious with how they spend their money and, foreign buyers, especially, have left the market as the dollar has strengthened while economies overseas have been facing issues.
For homes in the upper price tiers that have been on the market for 14 to 21 days, many realtors suggest reviewing the asking price and to consider lower offers. This can be difficult, as homeowners have grown accustomed to quick sales and bidding wars.