Luxury house sales have recently dropped significantly as the country struggles with economic issues.
On Monday, Forbes reported:
“According to a recent study from Redfin, a technology-powered real estate agency, sales of luxury properties decreased 38.1% year over year for the three months ending November 30, 2022, the largest drop on record. This exceeded a record 31.4% drop in non-luxury house sales. The data from Redfin dates back to 2012.”
“Many of the same causes slowed the luxury market and the broader housing market in 2022: inflation, relatively high interest rates, a falling stock market, and recession worries.”
Meanwhile, America’s housing market is seeing its second-largest price drop since the conclusion of World War II.
Mitch Roschelle, founding partner of Macro Trends Advisors, noted that the correction is related to citizens’ uncertainty and concerns about economic issues:
“A number of factors will force it to reverse course, implying that property values will rise. And when you don’t know if interest rates will rise or fall. That, I believe, is keeping many people away from purchasing because they don’t for sure if rates will be lower in two months, so they’ll simply wait.”
“Another source of concern is economic uncertainty. And I believe the shoe will drop if we start seeing layoffs and unemployment begin to climb; I believe this will create a significant collapse in the housing market.”
According to a new study, most Americans are still anxious about the economy under President Joe Biden’s (D) leadership.
“Of 1,000 potential voters polled between December 12-13, 86 percent say they are concerned about the economy, with 60 percent saying they are ‘very concerned,’ suggesting a rise in anxiety since August,” the study said.
According to the Forbes analysis, signs point to a rebound in demand in the home market as loan rates fall.
Pacaso CEO and co-founder Austin Allison recently discussed the real estate sector in an interview with Fox Business, saying, “What we witnessed over the previous couple of years was not normal, you know, properties selling in a couple of days for multiples over ask is not sustainable.”
“What we’re seeing now is a return to normalcy, so when you see headlines saying that real estate is down 30% year over year, it’s essential to note that real estate transactions are still up quite a bit when compared to pre-pandemic levels,” he said.
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