Midyear data was released this month and there is great news for the luxury home market in Charlottesville and Albemarle County. Luxury Homes are defined as homes in the price range of $700k to $3 million-plus. We’re more than halfway through 2016 and sales numbers are significantly stronger than they were at this point last year.
The graph above shows there have been 88 sales through June in 2016 compared to 40 sales in 2015 so we’ve seen a real sales surge in the luxury home market. This represents a phenomenal increase of 45 percent! I attribute the staggering increase to three factors:
- The stock market is at an all-time high
- The generally improving economy
- Interest rates continue to set new lows
You add all three of those up and it makes for a very good luxury home market.
Let’s look at the “Hot Spot” of the luxury home market.
As you can see from the graph above, the “Hot Spot” in the luxury home market has been the midlevel luxury home market which is defined as homes $700,000 to $1 million. So far in 2016 there has been 79 sales compared to 58 sales through this point in 2015. You’ve seen an increase in that segment of the market of 36 percent!
The last thing we want to talk about is inventory. While we’ve seen an increase of sales, we do need to take into consideration there are 267 homes currently for sale in Charlottesville and Albemarle County in the $700,000 to $3,000,000 price range. This represents a little over a one year supply (~12.5 months) of inventory which actually represent a buyer’s market.
Keep in mind the luxury home market will always carry a little higher level of inventory. Six months of inventory is what’s defined as a balanced market in the overall market but I would say in my experience it is typically closer to eight months in the luxury home market. Twelve months is a little high.
With that being said, if your home is on the market in the luxury home market, again $700,000 to $3 million-plus, I would be encouraged because you’re seeing an increase of sales. At the same time though I would also be extremely realistic when setting a price because it still is a buyer’s market in that price range.
So good news – increase of sales, a big surge compared to last year but again temper that with the current level of inventory. We expect this market to continue through the summer and on through the fall. As always, contact your Better Homes and Gardens Real Estate Agent today.