Luxury Market Update Year End for Connecticut 2009
In the last posting we defined the luxury market for the purpose of this writing as $1-$3M, $3-$5M and $5M+. We also reviewed the development of the market over the first nine months of the year.
Real estate has had an interesting ride since the fourth quarter of 2008 as a result of the challenges in the economy and the financial system in particular. Also, substantial expectations have been put on the new administration to take steps to stimulate the economy and establish some balance in the financial system / lending sector.
So, you might wonder how did the high-end market end for 2009?
In comparing the year end sales in the $1-$3M range from 2007 to 2009 it was interesting to see that although the number of unit sales dropped significantly year-to-year, the average sales price didn’t. In 2007 there were 2009 units sold, compared to 1279 in 2008 and 954 in 2009. The average sales price went down from $1.6 to $1.5 million (-6%) over the same time. Interestingly the average list prices for sold properties were constant at about $1.7 million for the whole period reflecting a net change between 2007 and 2009 of a 1.4% decrease. There was a significant change in new listing inventory over the past three years in this price range with 4838 listings in 2007 and only 3692 in 2009. This corresponds to a drop in listings of 24% over the two-year period.
The charts below represent the change in new listing inventory as well as the change year-to-year (orange) and the cumulative change (green).
As we go up in price point to $3-$5M we see the same trend. Unit sales dropped significantly year-to-year, but average sales price and average list price for sold listings show little change.