Higher priced homes are so much harder to sell compared to The rest of the housing market.
Luxury is Slow: With an Expected Market Time for all homes above $1.25 million of 213 days, luxury is sluggish.
There is no line at the deli counter. You walk in to your favorite restaurant and get seated right away. At the grocery store, all the check stands are open yet not a soul is checking out. It is sunny with no rain in the forecast, but when you pull up to get the car washed there is no wait. That just about sums up the luxury housing market, there are simply not enough buyers compared to the number of sellers; demand is low. There is no line of buyers waiting for yet another luxury home to come on the market. Yahoo Finance exclaims how the “Housing market bounces back.” CNBC touts how “Existing home sales at their fastest pace since March 2018.” The Los Angeles Times reports that “Southern California home sales and prices perked up in July.” It is understandable how luxury homeowners who list their homes have high expectations. The trouble is that none of these headlines applies to the luxury market. The headlines can be confusing. They seem to paint a strong housing market. They are NOT reporting on the luxury market; headlines describe the overall market. For homes priced below $1 million, Orange County real estate is much hotter and quite the contradiction compared to the upper end. Luxury housing is sluggish. Weekend open houses are not flooded with potential buyers. Multiple offers are extremely rare. It is not uncommon to go a week, or even weeks, without a single buyer touring a luxury home. There is very little buyer competition. A Seller’s Market occurs when the Expected Market Time (the amount of time it would take from coming on the market to opening escrow) falls below 90-days. Below 60-days, is a HOT Seller’s Market. The overall Orange County Market is at 86-days, a Slight Seller’s Market. That is when sellers get to call more of the shots during the negotiating process, yet homes are not appreciating much at all.