All over the media is talk of the slow down in the Atlanta real estate market. Sellers are frustrated their homes won’t sell and buyers are scared to make a move because they are not sure we have hit bottom yet. However, there is one segment of the Atlanta real estate market that is soaring and reaching new record numbers - the Atlanta Luxury Homes market.
You heard right, despite the fact that foreclosure rates increased 70% in 2007 and new home sales dropped 29% in 2007; the Atlanta luxury homes market surpassed all records! We reached an all time high of a $175 million in luxury home sales in January 2008. You may be racking your brain to figure out the reason why - do the rich really get to have all the fun? It’s actually just Economics 101 - supply and demand. While the supply of McMansions and $500,000 plus luxury homes is higher than ever, in the Atlanta luxury real estate market ($5M+) there is a shortage of properties.
A shortage may seem outrageous given the fact that there are currently $104,000 homes on the market in Atlanta and many agents are saying they have never seen the market so slow. Yet the US luxury home market increased by 31% in the first quarter of 2007. The purchase of Manhattan condos costing $10M + tripled in 2007! In our very own Atlanta real estate market, luxury home sales increased by 60%.
Another contributing factor is there are more wealthy people in the world than ever before. According to a report by Merrill Lynch’s World Wealth, the number of “ultra-high net worth” individuals ($30M or more) increased by 11.3% in 2007. There are now a total of 9.3 million millionaires worldwide. Not to mention with the American dollar being so weak, many wealthy individuals from Asia and Europe are looking to capitalize on the weak U.S. dollar. Buyers from Brazil, Russia, India and China are increasing rapidly as well.
What does this mean for the housing crisis, the mortgage mess, and the surplus of McMansions? Nothing really. It gives me hope that we will pull out of this glut sooner rather than later. I think the luxury market continuing to thrive will eventually fuel the rest of the economy. For the superrich, however, they are in somewhat of a league of their own.
Chrissy Neumann
REALTOR®
Castles By Chrissy, Inc.
Keller Williams Realty - First Atlanta
200 Glenridge Point Pkwy, Suite 100
Atlanta, GA 30342 | AtlantasPremierLuxuryHomes.com
0 responses so far ↓
There are no comments yet...Kick things off by filling out the form below.
You must log in to post a comment.