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Tag Archives: Silicon Valley

More sellers than buyers for luxury homes

Michael J. Berens

Monday, May 13, 2019

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More sellers than buyers for luxury homes

Sales of luxury homes have been falling since the beginning of the year. In most areas of the country, the number of luxury homes for sale has increased while selling prices have declined. Among higher-end properties, demand has especially dropped off as tax changes and fluctuations in the stock market have made luxury home purchases less desirable.

Many luxury homes were put up for sale following the tax reform changes that took effect as of Jan. 1 this year. Although the wealthiest households receive substantial tax breaks under the new law, those living in states with high state and local income, property, sales, and other taxes ended up paying more taxes this year because of new limits to state and local tax (SALT) deductions.

Interviews conducted by wealth investment advisors the Spectrum Group found households with incomes between $500,000 and $749,000 and those between $750,000 and $1,000,000 felt the greatest impact on their personal financial situation.

Among those hardest hit were residents of California, Connecticut, Illinois, New Jersey and New York — states with a substantial number of high-end luxury homes. Spectrum says there is now a wave of investors moving from high-tax states such as New York, New Jersey and Illinois to low or no-tax states, such as Florida, Washington and Nevada.

That exodus is reflected in the changes in the luxury home market in recent months. Web-based real estate brokerage Redfin reports that luxury home sales declined for the second quarter in a row during the first quarter of this year.

The average sales price for luxury homes nationwide fell by 1.6%, compared to the same time last year — the first annual decline in three years. Moreover, sales of homes priced at $2 million or more plummeted by 16% to their lowest point in nearly a decade.

In its Luxury Market Report for April 2019, the Institute for Luxury Home Marketing states that it is a buyer’s market for luxury homes at present. The number of listings between February and March was up by more than 2,000.

On average, homes are selling for below list price. However, the report indicates there are signs the market may be beginning to normalize. The median sales price was up $25,000 in March compared to February, at $1,425,000. Some 1,800 more luxury homes sold in March than in February, and homes were on the market 16 days less than in the previous month.

Part of the reason for the uptick in sales is the high demand for housing in some highly affluent metropolitan areas.

Even though California is one of the SALT states, it is still very much a seller’s market for homes priced at $1 million or more in tech-intensive centers like San Francisco, Silicon Valley and Sacramento. Other high-demand metro areas include Seattle; Arlington-Alexandria in Virginia; Los Angeles and nearby San Fernando Valley cities; and Denver and Boulder.

Those states with no state income tax that attract wealthy relocated households also have experienced higher-than-average sales of luxury homes. In Florida, for example, homes priced at $2 million or more have sold briskly in cities such as Coral Gables, Fort Lauderdale and Boca Raton, according to local real estate website The Real Deal. Luxury homes sales in Miami have jumped 161% since a year ago. Other areas experiencing higher sales include Charleston, Boise, and Nashville.

All this shifting about will impact interior designers differently in different areas. Taking the longer view, with the luxury prices beginning to stabilize and the economy barreling along with no signs of slowing down any time soon, the market is likely to perform much better in the second quarter, leading to demand for designer services in the second half of the year.

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About the Author

Michael J. Berens

Michael J. Berens is a freelance researcher and writer with more than 30 years of experience in association communication and management. He can be reached at mjberensresearch@gmail.com.

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The 15 Most Expensive Zip Code In The United States

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11962: Bridgehampton, New York

This nine-bedroom home, which sits on 20 acres and is reportedly owned by Christie Brinkley, is being offered for $29.5 million. (The market for luxury Hamptons real estate is so strong that last week Zillow Group launched Out East, a website devoted to the region with listings and town guides.)

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94027: Atherton, California

The suburb is the most expensive place to live in Silicon Valley. Here’s what $17.5 million will get you there (spoiler alert: five bedrooms).

gettyimages-857616668-1-1518472509

90210: Beverly Hills, California

This $70-million estate includes a 20,000-square-foot main house, a 7,000-square-foot guest house, stables, riding rings, and a tennis court.

gettyimages-600175874-1518472573

33109: Fisher Island, Florida

Located three miles offshore from Miami, Fisher Island was once the private home of William K. Vanderbilt. In the 2000 census, it had the highest per-capita income in the United States.

gettyimages-820179248-1518472705

94301: Palo Alto, California

An empty lot on less than 3/10 of an acre? That’ll be $5.4 million.

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11976: Water Mill, New York

A 42-acre estate originally built for the Ford family could be yours for $175 million.

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94022: Palo Alto, California

94022 includes parts of Palo Alto and Los Altos including Westwind Community Barn, shown here.

94028: Portola Valley, California

“Portola Valley generally attracts the affluent of Silicon Valley who prefer open space, country living, expansive lots, and stunning views,” according to the locally based DeLeon Realty.

90402: Los Angeles, California

This zip code incorates parts of Pacific Palisades and Santa Monica.

94305: Stanford, California

Stanford University sits on some of the priciest land in the country.

10013: New York City (Parts of Tribeca and Soho)

Move over, Upper East Side mansions. This downtown area is Manhattan’s priciest.

90265: Malibu, California

The celebrity beachside hangout currently has five properties available from $50 million to $85 million.

93108: Montecito, California

Fires and mudslides hit this Santa Barbara suburb in recent months; even Oprah Winfrey’s 65-acre estate was damaged.

92067: Rancho Santa Fe, California

A suburb of San Diego, Rancho Santa Fe is home to a 23,500-square-foot estate listed for $44.975 million. (The seller “will entertain offers between $39,900,000 [and] $44,975,000” though.)

11930: Amagansett, New York

Rounding out the list is another Hamptons hamlet. Located between East Hampton and Montauk, low-key Amagansett has been home to celebrities like Gwyneth Paltrow, Scarlett Johansson, and Sarah Jessica Parker and Matthew Broderick.

gettyimages-129351912-1-1518472914

 
94028: Portola Valley, California

“Portola Valley generally attracts the affluent of Silicon Valley who prefer open space, country living, expansive lots, and stunning views,” according to the locally based DeLeon Realty.

gettyimages-642614272-1518473171

90402: Los Angeles, California

This zip code incorates parts of Pacific Palisades and Santa Monica.

gettyimages-521445602-1518473259

94305: Stanford, California

Stanford University sits on some of the priciest land in the country.

gettyimages-854800642-1518473372

10013: New York City (Parts of Tribeca and Soho)

Move over, Upper East Side mansions. This downtown area is Manhattan’s priciest.

gettyimages-108116161-1518473473

90265: Malibu, California

The celebrity beachside hangout currently has five properties available from $50 million to $85 million.

gettyimages-521170522-1518473530

93108: Montecito, California

Fires and mudslides hit this Santa Barbara suburb in recent months; even Oprah Winfrey’s 65-acre estate was damaged.

gettyimages-567374079-1518473655

2067: Rancho Santa Fe, California

A suburb of San Diego, Rancho Santa Fe is home to a 23,500-square-foot estate listed for $44.975 million. (The seller “will entertain offers between $39,900,000 [and] $44,975,000” though.)

gettyimages-583645500-1518473802

11930: Amagansett, New York

Rounding out the list is another Hamptons hamlet. Located between East Hampton and Montauk, low-key Amagansett has been home to celebrities like Gwyneth Paltrow, Scarlett Johansson, and Sarah Jessica Parker and Matthew Broderick.

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Apple Is Leading a Revolution in Office Chairs

The Pacific, from British star designers Barber & Osgerby, reveals a changing Silicon Valley.

If you know one office chair by name, it’s probably the Aeron. Released in 1994, its radical, high-tech exoskeleton design was a sensation, and the chair went on to become that rare piece of furniture to emerge as a pop-­culture signifier. In 1995 it appeared as the lone piece of set decoration in a Levi Strauss & Co. Super Bowl commercial; later, it served as a plot point in an episode of Will & Grace.

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