What Are the Top Luxury Markets in North America Right Now?
Excerpts: Where are the hottest high-end real estate markets? Whether you’re looking to specialize in luxury home appraisals or you’re simply reading up on the latest market trends, you may want to pay attention to areas where luxury homes are in high demand.
According to the Institute for Luxury Home Marketing’s February 2024 report¹, the single-family luxury home segment is showing promising signs of growth. Both inventory levels and new listings increased significantly in recent months, leading to an 18 percent increase in sales and a 1.6 percent increase in the median sold price. Even more telling, contract signings for homes priced at $1 million or more have increased by 11 percent over last year, and demand remains high among affluent buyers.
According to the Institute for Luxury Home Marketing’s February 2024 report¹, the single-family luxury home segment is showing promising signs of growth. Both inventory levels and new listings increased significantly in recent months, leading to an 18 percent increase in sales and a 1.6 percent increase in the median sold price. Even more telling, contract signings for homes priced at $1 million or more have increased by 11 percent over last year, and demand remains high among affluent buyers.
Top list of luxury home markets in 2024. You may be surprised!
To read more, Click Here
My comments: In this newsletter, I always know what are hot topics. Constant Contact gives me the number of clicks. Most popular is usually Claudia’s advice at the top of every email. Also popular are large luxury homes with a photo.
I have been thinking for a while about including appraising luxury homes, since my subscribers like to read about them. Maybe a possible specialization? There were not many where I worked, so I did not specialized in them But, I see my area, East Bay California is listed now! The median home price in the Bay Area is around $1,300,000.
Check out the list of areas in the article to see if any are close to you.
Lenders have always had special, very small lists of appraisers who can appraise these homes. I assume the AMCs have these types of lists. Some may not have them. You definitely must get a higher fee for them.
I know several appraisers who have been doing them in my area for a long time. To do them, it is best to work in an area with many luxury homes. You need to network with the brokers that sell them.
The post above is also a promo for McKissock’s Certified Luxury Home Appraiser Program. 14 hours of CE for $650. I have not taken it, but I don’t know of many other types of diversification with a certificate. Might be interesting even if you don’t know if you want to do them.
CubiCasa – Home Measurement From Inside A House
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NOTE: Please scroll down to read the other topics in this long blog post on residential fee appraiser testifies at bias hearing, boom and bust markets, unusual homes, mortgage origination stats, etc.
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For $20M, Mega Man Cave Comes With a Phoenix-Area Mansion
Excerpts: 5 bedroom, 6 bath, 9,326 sq.ft., 4.36 acre lot
For $20 million, the buyer will get not only a 10,000-square-foot house, but also all of the other structures and furnishings.
This home has a sprawling man cave, go-kart track, golf simulator, batting cage, day spa, and much, much more.
This place comes with something for everyone. How about a 6,000-square-foot man cave and a two-story closet for your favorite fashionista?
The primary suite is “ginormous,” the listing agent continues. “The wall opens all the way up, and the glass disappears into the wall. You can open it up and see everything in the backyard. Then you go into the bathroom and there’s a huge steam shower and an aquarium.”
To Read More, Click Here
To see the full listing with 119 photos, Click Here
My comments: Check out the photos. Special features go on and on! Wow! Big man cave, 2-story closet, etc., etc.! Over-improvement? Too personalized? Lots of buyers? Definitely a high appraisal fee! Cubicasa or another measuring app is recommended.
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Recap of the 4th ASC Appraisal Bias Hearing with Comments
I wrote about this last week and included PDFs of Maureen Sweeney’s two testimonies. This post has the full hearing video plus comments in Phil Crawford’s Voice of Appraisal video. Plus appraiser comments.
Excerpts: In his recent video, Phil Crawford, host of the Voice of Appraisal, provided a breakdown of the ASC appraisal bias hearing. His analysis was hard-hitting and shed light on the important points discussed during the event. It is highly recommended for all appraisers to listen to his podcast and to stay informed about the current state of the industry.
An important issue that has long been overlooked, was acknowledged by the panel members and speakers that there may be instances where deficiencies in competency are misreported as bias complaints. This is a positive recognition, as it shows that efforts are being made to differentiate between actual cases of bias and other issues that may be mistakenly categorized as such.
The ASC is accepting public comments on the hearing until March 8th, 2024. It is crucial for as many appraisers as possible to submit their comments and concerns to AppraisalBiasHearing@asc.gov. This is an opportunity for appraisers to have their voices heard and contribute to shaping the future of the industry.
To read more, including Sweeney Testimonies and Crawford Video, Click Here
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New in the March 1, 2024 issue of Appraisal Today:
- How to manage your email and keep your inbox from filling up!
- Extraordinary Assumptions – When, Why, How by Timothy C. Andersen, MAI and Craig Morley
- Answers and Solutions for Tough Appraiser Questions & Client Demands. A reference Guide to Associated Laws, Rules, and Regulation. By Richard Hagar, SRA, Book Review
Managing your email – many practical tips for appraisers. A good time, while business is slow.
Extraordinary Assumptions – How to stay out of trouble with your state board. They closely watch use of this phrase.
Hagar Book. Only $35. Lots and lots of good advice. Business slow? A good time to read this book. Plus info on his webinars and classes.
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Pardon My Heuristic, It’s A Little Biased
By Brent Bowen
Excerpts: If you have a brain, you are biased. You can’t help it. Without mental shortcuts we would never get anything done. It is the helpful aid of heuristics that keeps you from taking hours to mentally process how to get dressed in the morning. Life without these mental shortcuts isn’t an option, it is hardwired into our DNA. So, like it or not, we all have to deal with cognitive biases, too.
When we are accused of bias, System 1 kicks in and we feel shame or maybe embarrassment and want to react defensively. “You’re crazy! I’ve never been biased in my whole life! You just hate [people group]!” If we give voice to that reaction, we are likely to elicit the same defensive reaction from our accuser. Nothing changes. Everyone remains unconscious of their own potential biases (both the accuser and accused), and the cycle is perpetuated.
Let’s take this into the practical world of real estate appraisal. There is great debate in the appraisal community with regard to bias, particularly racial bias. The accusation has been made largely from people who may not really know a single appraiser or understand the appraisal profession or process. The accusers are largely acting out of their own set of biases. So, each of us has a choice of how to respond. Of course, the accusation is twofold, systemic and personal (there is always a personal component, since every system is a system of humans). Let’s set aside our opinions on how best to respond to the accusation of systemic bias and focus on personal bias. Let’s consider a real-life scenario where a good, well-intentioned appraiser allows System 1 thinking drives the process, and another where System 2 thinking is engaged…
To read more, Click Here
My comments: Definitely worth reading the full article. I had never read about this bias topic before.
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Revisiting Boom-Bust Markets After Recovery in House Price Growth
By Mark Fleming on Tue Feb 27 2024, First American Blog Post
Re-Acceleration in House Prices Prompts Re-Examination of Boom-Bust Markets
A year ago, we separated the top 50 markets into four categories1 : boom-bust, boom-no bust, no boom-bust, and no boom-no bust. In January of 2023, nominal house prices had declined from their recent peaks in 35 of the top 50 markets we track. Since then, house prices have re-accelerated in many markets with 33 of the top 50 markets reaching a new house price peak in December and only 17 markets with house prices below their recent peaks.
Boom-Bust: Only two markets remain in the boom-bust category: Austin, Texas and Phoenix. House prices increased 65 percent from February 2020 to the peak in May of 2022 in both markets. Since then, nominal house prices have declined by 6 percent and 3.8 percent, respectively. House prices in these pandemic “boom towns” overheated during the pandemic, but prices are now ‘busting.’
No Boom-Bust: The example of a no boom-bust market is San Francisco. In San Francisco, house prices increased 31 percent from February 2020 until the peak in April 2022, lower than the average growth rate across the top 50 markets. Prices have since declined by 8 percent from the peak. Other markets in this category include Sacramento, Calif., Seattle, and San Jose, Calif. These coastal markets have long been among the most expensive and there wasn’t as much room for prices to rise from pre-pandemic to peak, but when mortgage rates more than doubled in a year, those already expensive markets felt the pain from the corresponding pullback in demand.
To read more, Click Here
My comments: Worth reading. Consider subscribing. I subscribe. Some interesting posts and podcasts (The REconomy Podcast). What happened in your market?
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A Desert Stream Runs Through $3M Arizona Mansion Built Into the Boulders
Excerpts: 4 bedrooms, 6 baths, 6,629 sq.ft., 1.02 acre lot, built in 1993. Price dropped from $3,315,000 8/23/23
At the entry, there are two huge boulders that have been incorporated into the design of the home, so you feel like you are really connected with the outdoors,” Paluscio noted. “It’s a beautiful way to bring the outdoors inside.”
Known as La Casa Sobre La Laguna (translated as “the house over the creek”), the property sits on an acre that offers mountain, golf course, and boulder views—plus some interesting wildlife.
“The property also has a nice connection with nature; it has an abundance of wildlife, including lizards, bobcats, and javelina,” Paluscio says, referring to the wild boar-type creatures. “It feels like you are in a nature preserve. If you are a wildlife lover, it’s a lot of fun.”
Another cool feature is the stream that runs under the house that can be viewed right through the floor.
“There is also a manmade desert stream that runs under the house,” Paluscio says. “You can look down from the walkway and den area, through these glass tiles on the floor, and see the bobcats hanging out underneath.”
The property also features two private guesthouses and a four-car garage.
To read more and see the interesting photos, Click Here
To see the listing with 46 photos, Click Here
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HOW TO USE THE NUMBERS BELOW. Appraisals are ordered after the loan application. These numbers tell you the future for the next few weeks. For more information on how they are compiled, Click Here.
Note: I publish a graph of this data every month in my paid monthly newsletter, Appraisal Today. For more information or get a FREE sample go to www.appraisaltoday.com/order Or call 510-865-8041, MTW, 7 AM to noon, Pacific time.
My comments: Rates are going up and down. Many appraisers are not busy. Some are busy, usually with non-lender appraisals.
Mortgage applications decreased 5.6 percent from one week earlier
WASHINGTON, D.C. (February 28, 2024) — Mortgage applications decreased 5.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 23, 2024.
The Market Composite Index, a measure of mortgage loan application volume, decreased 5.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3 percent compared with the previous week. The Refinance Index decreased 7 percent from the previous week and was 1 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 5 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 12 percent lower than the same week one year ago.
“Mortgage rates were little changed last week, with the 30-year conforming rate declining slightly to 7.04 percent but remaining about a quarter percentage point higher than the start of the year,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “Higher rates in recent weeks have stalled activity, and last week it dropped more for those seeking FHA and VA refinances. Purchase activity is running 12 percent behind last year’s pace, but our January Builder Application Survey results showed that applications to buy new homes were up 19 percent compared to last year. This disparity continues to highlight how the lack of existing inventory is the primary constraint to increases in purchase volume. However, mortgage rates above 7 percent sure don’t help.”
The refinance share of mortgage activity decreased to 31.2 percent of total applications from 32.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.5 percent of total applications.
The FHA share of total applications decreased to 13.0 percent from 13.2 percent the week prior. The VA share of total applications decreased to 11.7 percent from 12.1 percent the week prior. The USDA share of total applications remained unchanged at 0.5 percent.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 7.04 percent from 7.06 percent, with points increasing to 0.67 from 0.66 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $766,550) increased to 7.20 percent from 7.16 percent, with points increasing to 0.57 from 0.45 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.86 percent from 6.91 percent, with points decreasing to 0.99 from 1.03 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 6.70 percent from 6.61 percent, with points decreasing to 0.68 from 0.77 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 ARMs decreased to 6.33 percent from 6.37 percent, with points decreasing to 0.58 from 0.71 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, and thrifts. Base period and value for all indexes is March 16, 1990=100.
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Ann O’Rourke, MAI, SRA, MBA
Appraiser and Publisher Appraisal Today
1826 Clement Ave. Suite 203 Alameda, CA 94501
Phone: 510-865-8041
Email: ann@appraisaltoday.com
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