ATLANTA — Cash buyers, low mortgage rates and rising consumer confidence are among the biggest drivers pushing luxury housing in the U.S., according to luxury real-estate agents at the annual conference of the National Association of Real Estate Editors.
The luxury markets, which vary from a low-end in Atlanta of $750,000 to a minimum in Los Angeles of $3 million, are rebounding as buyers bounce back from the housing crisis. International buyers are fueling some purchases, with up to 20% of buyers in L.A. being from overseas, says Kofi Nartey, an agent at The Agency in L.A. Many of them are paying full cash, speeding up closings and eliminating the need for appraisals. He adds that there were 697 home sales over $5 million in California in 2012, an all-time high, many of which were all-cash deals. In other markets, the low interest rates are spurring sales. In Cape Cod, for example, buyers who traditionally paid cash are lining up for mortgages with 2.25% interest rates and 10-year terms, says Jack Cotton, an agent at Sotheby’s International Realty. In Atlanta, 80% of luxury buyers are financing their purchases, according to David Boehmig, president of Atlanta Fine Homes, who says pent-up demand has helped his market recover. Amenities buyers are looking for include outdoor kitchens with large patios, home spas and properties with a story — say, a famous former owner or a renowned architect. Mr. Nartey says certain ultra-high-end clients also are drawn to the “wow factor,” citing one current home being built that went through a maze of hurdles to get the city of L.A. to allow it to build a moat around the home. As for pricing, the highest sale in Mr. Cotton’s market in the past couple of years has been $19.5 million, while the Atlanta market has seen a $10 million sale. In L.A., Candy Spelling’s manor, which sold for $85 million, still holds the record in recent years. On list prices, Mr. Nartey said it won’t be long before the U.S. sees a $200 million listing — the record now is believed to be $190 million for a property in Greenwich, Conn. — but that many of these ultra-high-end properties are priced that way merely as a suggestion, or to invite only a certain caliber of buyers to the table. Most ultra-high-priced homes end up selling for 50% to 60% of the original list price, he added. Agents are also seeing an increase in pocket listings, or listings that aren’t publicly put into the multiple-listing service, both as a way to keep a seller’s name confidential and to up the exclusivity factor. Pocket listings are viewed differently depending on the market. Some agents don’t mind them, but other agents say they limit the exposure of the property, making it harder to sell.