Luxury Homes Languishing

An interesting article written by the Associated Press and published on MSNBC.com discusses the slowdown in the luxury home market. According to the National Association of Realtors there is a 40 month supply of homes priced over $750,000.

I wondered if our inventory of luxury homes in Brevard County shared that same statistic, so I did a little research.

In fact, we have sold 53 luxury homes since January 1, 2009, but still have 463 luxury homes currently on the market. That equates to approximately a 38 month supply with average days on the market 247.

A quick snapshot of the number of luxury homes sold in previous years in Brevard County:
2008 117 luxury homes sold
2007 148 luxury homes sold
2006 220 luxury homes sold
2005 322 luxury homes sold

(all statistics taken solely from the Brevard County, FL MLS)

According to the AP article, a big reason for sluggish high end home sales is the lack of availability of jumbo loans. Fannie Mae and Freddie Mac, the government backed mortgage lenders can not purchase mortgages above $729,500, so jumbo loans must be held in house by lenders. For this reason, lenders who do offer jumbo loans also charge a higher interest rate than a traditional 30 year mortgage.

However, despite the higher interest rate, if you are in the market for a luxury home, since prices have declined so dramatically, you will also pay less in taxes and insurance. And you will be buying at the bottom of the market, so the opportunity to build equity is that much greater.

To view all our luxury homes in Brevard County click on: http://sthomson.servingbrevard.com/

To read the entire AP article click on: http://www.msnbc.msn.com/id/31782625/ns/business-real_estate/ns/business-real_estate/