The Housing Supply Index for Luxury Homes
The Minneapolis Area Association of Realtors puts together really great statistics for the 13 county metro area. One of the best is the Housing Supply Outlook stats that shows how many months it will take to sell the current inventory. A normal market usually has a five month window…that’s a great market. But that time window leans more towards the average home price which is right now at 8.5 months. When you start talking about higher priced homes, especially those in the luxury home market, the housing supply index naturally goes up.
In the above graph, red represents 2007 and blue is 2008. The whole market has slowed down from last year, and none so more than the luxury market. Currently is would take 17 months to sell our entire inventory of homes price between $500,000-1 Million, and 26 months to sell all homes over $1 Million.
To put both these upper tier categories into context, there are currently 3,032 homes for sale priced between $500,000-1 Million, and only 867 homes listed for over $1 Million. If you are thinking of putting your home up for sale in the first price range, even though there is more competition, you possibly will sell your home quicker (based on the supple index) than if you priced it above the million dollar mark.
Now don’t be upset if your home is worth more than a million. It will sell if you price it right, and price it ahead of the market. But know up front that it most likely will not sell in two months. Luxury homes typically take longer, as the housing index shows, so be prepared for your home to sit on the market for a while, and have fewer showings than lower priced homes. The luxury home market decreases the amount of buyers available, and of course, location is one of the major deciding factors when purchasing a home.
Keep your chin up…the market will improve….just make sure you pick an agent to represent you that actually specializes in luxury homes, not one that just wants to list your home so they can get a bigger paycheck.