It seems that while regular home sales are on the rise, those homes that cater to the higher class are rising as well. According to the Toronto Real Estate Board, the fourth quarter has started well with October listings of luxury homes rising by 64 percent when compared with October 2008.
Currently, the average price for a home in the luxury range was up 20 percent, rising to $423,559 in October.
The rise in luxury home prices and sales is mirroring that of homes in lower price ranges. However, the largest increase in the luxury home bracket actually came in sales of homes over $750,000. Amazingly, the sales of these homes rose 200 percent over the sales of similar priced homes in October of 2008. The reason for this is because in the winter the world went into a recession and luxury item purchases fell drastically. No one, not even the rich, wanted to spend too much on items out of worry that the recession would be a long one. While the recession is still hurting places like the United States, in Australia and Canada, things are looking much better.
As a result, more luxury items are being bought in the last quarter of this year because the economy is beginning to improve. Since mortgage rates are at historic lows, there is more money to be saved when buying luxury homes, which is why there is such a large increase in the luxury home market.
Again, it does need to be stressed that overall, home prices and sales for all homes, including luxury homes, are only slightly above that for 2008. While 2009 has seen some large increases from July to November, January to June saw record home lows and falling prices. While on the flip side, January to October of 2008 saw large increases in prices, and November to December is when everything tanked. So, overall the prices and home sales are only slightly improving over that of 2008. However, 2010 has the makings to be a very good year for real estate agents, buyers and sellers alike.
If the rich are ready to start buying expensive homes, then there is a good chance that the economy will continue to improve as the months go by and that is good news for the rest of us. The more the rich spend, the more money that goes into the economy and that is better for everyone.
Posted: 2009-11-19 16:06:10
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