After grinding to a complete halt, the luxury market is pumping on all cylinders.
Luxury Strength: The upper end of the housing market is strong with plenty of demand.
In Batman v Superman, in order for Superman to kill Doomsday, a gigantic monster that is also from the planet Krypton, he sacrifices himself by taking a krypton spear (his only weakness) and launches it into Doomsday. Both Superman and Doomsday die. Many moviegoers left the movie theater in disbelief, the ultimate superhero had perished. Yet, in Justice League (2017), through the power of the Mother Box and a giant electric spark from The Flash, Superman was revived to help save Earth from the evil Apokoliptian general Steppenwolf and his army of Parademons. Superman returned, was unstoppable, and helped defeat the villain. The luxury housing market in Orange County came to screeching halt in mid-April. It appeared as if luxury housing had perished in 2020 and would not be revived until 2021 at the earliest. The Expected Market Time (the amount of time between hammering in the FOR-SALE sign to opening escrow) increased to 322 days for all homes priced above $1.25 million. Fear and uncertainty shrouded the upper end amidst the COVID-19 pandemic and California’s “stay at home” order. It left many luxury sellers in disbelief, wondering if they would ever be able to sell their homes without major price cuts. Yet, the market began to improve after bottoming in April. Slowly but surely demand picked up in every price range. Luxury was revived on the backs of increased confidence in Wall Street, a low mortgage rate environment, and the realization of the importance of “home” in the middle of a pandemic. Everybody is acutely aware of the significance of the home office, additional living space, a larger yard, and the many amenities that make life at home more enjoyable. In taking a closer look at luxury, today’s Expected Market Time is at its lowest point in years, 111 days. That sounds high compared to the overall Orange County housing market at 47 days, but it is extremely strong for the upper end, and quite an improvement from the 322 day mark reached in mid-April, the middle of the Spring Market.
