Ten High-End Home Hot Spots

In many parts of the country, luxury home buyers are finding deals. But those searching in specific markets are often finding better ones.

 

Nationwide home prices dropped significantly in the last year, according to the National Association of Realtors (NAR). The median existing-home sale price in the Northeast fell 9.6% in the second quarter this year, compared to the same period in 2007. The Midwest fared better; there, prices fell just .9%. In the South, prices are down 4.1% and in the West, a whopping 17.4%.

 

Prices in the high-end housing market--the 2% of homes in the U.S. that sell for over $1 million--have largely remained insulated from the nationwide downturn. But in some areas, prices have fallen to a point that makes luxury homes affordable to buyers previously locked out.

 

These include Boston, Chicago and Los Angeles. Prices there are down 8%, 7% and 21%, respectively, in the last year, the NAR reports. This means Los Angeles-area buyers looking at homes in the $4 million to $5 million range may get what would have cost them an additional $1 million last year.

 

In Miami Beach, Fla., luxury home prices have fallen 20% since early 2006, says Nelson Gonzalez, senior vice president of Esslinger Wooten Maxwell Realtors in Miami Beach. The Venetian Islands and the middle causeway areas of the city have been especially affected by the slump.

 

"There are good deals to be had, but we're a little bit immune to the soft market," says Gonzalez, who notes that sales volume has been increasing. "You have to have money to live in Miami Beach, because the cost of living is so high."

 

Wallet-Worthy Amenities

 

Still, in many places, your dollar goes far. Besides featuring luxurious kitchens, private pools and dozens of fireplaces, some high-end homes are in areas with top-notch school districts, beach views and solid cultural and entertainment options.

 

Oftentimes, that's enough to keep prices up. While sales volume in Aspen, Colo., has decreased 40% since the beginning of the year, according to Brent Waldron, managing broker at Coates, Reid and Waldron, home prices haven't budged. According to the S&P/Case-Shiller Home Price Index, prices in the area have risen .6% since the beginning of the year.

 

"It's because our sellers can wait," he says. "But there's much better selection, and, in many cases, sellers are negotiating off of list price."

 

In the high-end sections of Austin, Texas, like the Lake Travis area, which is known for its luxurious lakefront properties, sales have slowed, and luxury properties are selling between 10% to 20% below market price.

 

"We've weathered the storm better in the high-end range," says Mary Land, broker and owner of Capital City Sotheby's International Realty In Austin. "Our numbers are down, but not down to the point where we're seeing brokers leaving or consolidation."

 

Luxury home sellers in the Hamptons, including towns like Montauk, Sag Harbor and Southampton, have been lowering prices slightly because there aren't as many buyers.

 

"It's a great time to buy now, especially for anybody looking for new construction," says Susan Breitenbach, senior vice president of The Corcoran Group in Bridgehampton, N.Y. "But, it'll definitely start going back up next year ... There's still a lot of money and very few places."

 

Some bargain house hunters have the weak dollar to thank. Buyers from the U.K., Russia and Asia are gravitating toward San Francisco, Manhattan and Boston.

 

"There's a perception that we're a bargain right now for the international consumer," says Tarin Patrick, of Boston-based Gibson Sotheby's International Realty. If a foreign family has a child in one of the many Boston-based colleges, parents are more likely to buy than rent a luxury apartment for four years. "Boston makes for a really interesting investment opportunity," says Patrick.

 

Many brokers are urging their clients to act fast. Any high-end slowdowns should dissipate by next year.

 

"When I see a lot of Americans buying when the economy is not great and notice that consumer confidence is stronger on the high end, that's a very good sign that we've hit the bottom," says Gonzalez.