The ultra luxury category has been the scene of much debate.
There has been much private discussion in the region’s real estate community about the conditions in the ultra luxury segment above $2 million in listed value.
Conditions in the range below $1 million are fairly well documented to be highly active, with many areas seeing very competitive buying markets and limited inventory.
The ultra luxury category has been the scene of much debate however, with some luxury agents speculating of a possible slow down.
The data points do not appear to support a “slow down” in the classic sense of lower buyer activity, in fact recent showing activity, particularly in the 2m to 2.5m range shows just the opposite. That showings in 3 of the regions key ultra luxury areas, Cornelius, Charlotte, and Mooresville, are all running ahead of last year’s March to May period, in some cases by as much as 50%.
The below chart shows the relative increases in total showings in all three areas, according to the regional MLS showing statistics for all homes in the over $2 million range.
(Click Chart Below For Larger Image)
While this is encouraging, it’s not the entire picture.
The chart above describes total showings, which can also be impacted by the number of homes available to look at (i.e. if there are 5 homes listed and 2 buyers, the total showings will at most 10, but if there are 20 homes yet only 2 buyers, the total showings could be 40). So it is important to also consider the average number on a per home per basis.
In all 3 areas, the average runs roughly around 2-3 showings per month, and while this year’s average per home is up slightly in all 3 areas, it indicates that while there are likely more buyers, they also have a lot of options and thus are looking at more houses per buyer. Couple this with the increased trend toward major remodel projects, tear down/build projects (particularly over 3 million in total value), and the ultra luxury market is seeing buyers look at more options, which can mean a longer cycle, spread across both resale and build options.
While the re-sale residential market over 2 million is generally running at or ahead of prior year trailing “sold” numbers (8 at Lake Norman and 9 in Charlotte over the past 6 months vs lower numbers in 2015), as well as very solid “pending” numbers (9 in Charlotte and 5 at Lake Norman over 2 million), the fact that some buyers are choosing the construction option is leaving fairly competitive conditions for sellers in the resale market.
There does not appear to be any type of “slowing” in the sense of number of buyers, in fact the opposite, they just have more options than they did coming out of the recession, when banks were not loaning money for construction projects.