Luxury buyers seeking second homes in suburbs catapult growth among million-dollar listings
Luxury market is leading housing rebound, expert says
Wealthy homebuyers are returning to the housing market in force, seeking out luxury properties to add to their real estate repertoires.
Searches for million-dollar homes rose by 7.3 percent year over year in May, according to new data from Realtor.com, outpacing pre-pandemic growth. That compares with April when the same queries were down nearly 10 percent compared with the year prior.
Price growth among million-dollar listings also outpaced the rest of the market.
“The COVID-19 pandemic has reinforced the resilience of the housing market and unlike prior downturns, the luxury market is leading the recovery,” Realtor.com chief economist Danielle Hale said in a statement. “Stay at home orders and social distancing have put a new value on the extra space. We’re seeing this in the luxury market as well, which could mean there is renewed interest from high-end buyers to find a second-home that is within driving distance from their primary residence.”
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Many wealthy homebuyers were seeking out second homes in areas like the Hamptons in New York, Palm Springs, California, and Greenwich, Connecticut.
There has been a migration of people from densely populated urban areas to the suburbs as the coronavirus pandemic has put a greater premium on private property and space.
For example, with inventory in the Hamptons dried up due to ravenous demand, many Manhattanites began to look in suburbs along Long Island’s “Gold Coast.”
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Like buyers in all sects of the market, limited inventory is a challenge for luxury buyers with million-dollar listings down 15.6 percent in May.
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The return of wealthy buyers to the market comes at a time when millions of Americans are struggling financially – with 45 million people filing unemployment claims since mid-March.
As previously reported by FOX Business, coronavirus-related financial fallout has highlighted a growing wealth gap among homebuyers.
White-collar workers in high-security jobs, like technology, where duties are able to be performed remotely, have continued their home searches. Others, who have been struggling more throughout the pandemic, have been priced out of the market.