In yet another sign the middle class is going extinct, luxury real estate is booming while the rest of the market has tanked, reports USA Today.Today cites several reasons for the divergence: Multimillion dollar mansion sales are up 25% compared to the rest of the market, which has suffered a 30% decline in prices since its peak in 2007.
The luxury market can be had for a bargain–the price of houses under $1 million dropped more than 1.5%, while houses priced $1 million and up inched up in value by 0.7% since February, according to Zillow. And for wealthy shoppers with nary a mark on their credit report, it’s easier than ever to purchase a home.
Demand is also bolstering luxury home sales, says Today:
Wall Street’s recovery has brought back the market for mansions in the Hamptons, on Long Island, where the number of real estate closings has returned to the 2007 level, and for luxury co-ops in New York City. And because of social network riches in Silicon Valley, twice as many homes have sold for $5 million or more this year than last.
This also makes the market attractive to international buyers, who bought $82 billion worth of U.S. real estate this year, up from $66 billion in 2009.
The paper spoke to a Birmingham real estate agent who sold a lakefront property to a Russian entrepreneur. After 30 years in the business, he says he doesn’t even recognise his clients anymore–a sentiment we’re sure the rest of the non-luxury market feels about housing itself.
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