The slow real estate market is taking its toll on the once almost immune Luxury Home Market segment. Previously luxury home sales remained substantially constant despite downturns in the non-luxury market. This was due to several factors:
· Blimps in the economy have had less impact on the wealthy
· Real estate has proven to be a good long term investment and a good place to diversify one’s portfolio
· Lifestyle remains an important consideration for this market segment
However, the present impact on the economy has now crept up to this price segment. As shown on the following chart, the number of million dollar plus home sold in Washoe County decreased 57% from Q1, 2007 to Q1, 2008.
Price per square foot actually increased a modest 9% during this period from $341 to $373. However, the mounting inventory will continue to put pressure on home prices in every segment. There are currently 316 $1M+ Washoe County homes listed for sale on MLS. With an average of 5.8 homes selling per month in this price band, that equates to 54 months ( 4.5 years) worth of inventory (Yipes!).
For the first quarter of this year Montreux led the pack with 5 $1M+ homes sold sales or 38% of total.
The most expensive home was recently sold in the Holcomb Racnh area with a sold price of $4M. It is on 4.25 acres and has 6632 sq. ft.
Data Courtesy of NNRMLS