Most people are aware that when the real estate market crashed, one of the hardest hit sectors was Luxury Real Estate.  We are now seeing a resurgence in Luxury Real Estate across the US.  We will briefly look at each vertical within the luxury market and some worries that US Government has with international buyers of luxury real estate. luxury real estate market is returning

Luxury Real Estate Developments

Luxury Real Estate Developments all over the country either went bankrupt or were selling at pennies on the dollar.  Today, with the real estate market coming back, we see a resurgence in Luxury Real Estate.  The Luxury Real Estate Market is seeing growth because of a couple of reasons:
  • Interest rates are starting to stabilize.  Many savvy individuals that feel the real estate market is at the bottom and about to turn around are leveraging their funds.
  • Very little yield in money market accounts.  Money Market and savings accounts are providing an extremely small return.  This is driving people with money to invest in a variety of higher yield investments.  Real Estate, with its proven long term track record is a good place to have your money tied up.
  • The Real Estate Market is ready to come back and with a vengeance. We are still seeing low supply and high demand only offset by the higher than normal interest rates.  Days on Market is still historically very short.

Luxury Condos

Luxury Condos have made a comeback.  Some areas, such as Florida, saw devastating reductions in value when the market took a turn for the worst.  We have seen certain markets such as Luxury Condos in New Orleans see big gains.  Although prices have not gotten back to the insane prices pre-crash, we are seeing solid movement and more than enough money to have the developer make a profit.

Residential Real Estate Markets Recovering

With many residential real estate markets across the country starting to recover from the bust, some areas have seen tremendous growth in the Luxury market.  Don’t let the statistics fool you, in some areas such as Florida condos and Los Vegas new construction have seen tremendous growth, but only because of their tremendous decline.  Many of these markets are just getting back to pre-bust pricing.  One of the luxury real estate markets that didn’t see a huge decline but has benefited from the new factors driving up prices is the Park City UT area.  Park City real estate and many of the surrounding areas are at an all time high.  Even when the credit markets were dry, areas such as Empire Pass have continued to see price increases.

Influx of International Money into Luxury Markets

With investing options worldwide not having strong yields, we have seen a tremendous influx of international money come into the US Luxury housing market.  Some of the strongest real estate markets have seen quite a bit of international investors come in to purchase properties.  We have noticed that Texas has seen an influx of international investors as has New York and Florida.

The US Government Pays Attention

Many are worried about the influx of international investors into the US luxury real estate market.  In addition, there are scares of the US loosing oil being bought in dollars, which is a boon for the US.  Now, the US Department of the Treasury will be looking much closer at cash purchases for luxury properties over one million dollars.  The Department of Treasury is worried about international money being “washed” via cash, luxury real estate purchases.  New rules are going into effect to monitor these types of purchases in a limited number of states.