It’s a very strange real estate market.
Sales of luxury homes plunged in Q1. The most extreme drops were in places like Miami and the Hamptons.
But prices are holding due to limited inventory.
We’re in a new period that most people are not accustomed to. We had years of low interest rates that fueled real estate deals and drove up prices.
Then we had the pandemic, which drove up prices for real estate even more, particularly in hot spots like Miami, but also in places like Boise that became getaways during that period.
Now some places like Boise have certainly experienced a correction in prices. We’ll see what happens in Miami. Many I’ve spoken to said rents are decreasing in South Florida, and many are not selling luxury real estate for a variety of reasons.
One interesting factors has to be interest rates. Many homeowners have the benefit of very low rates on their mortgages as they bought before the recent spikes. What is their motivation to sell?
It’s going to be very interesting to see how this plays out.
