If you are looking to spend $1 million or more on your next home, you could find that inventory in this segment of the market is troublingly tight. According to CNBC, the residents of the country’s richest zip codes do not appear to be interested in selling these days, with inventory levels down as much as 50 percent in some areas of the country. For example, in Carmel, California, only four homes priced in excess of $1 million were even on the market at the end of May 2013, and in Palm Beach the “$1-million-plus” inventory is down by 70 percent year-over-year. Overall, in the 90 wealthiest zip codes in the U.S., inventory is down 15 percent.
Real estate professionals in these zip codes warn that a tight inventory could slow sales, although sellers will certainly be glad to be at the center of some competitive bidding and fast action. One Greenwich, Connecticut real estate agent reported selling a $1.38-million home in just two days – after 14 showings. “The…market right now is just super hot,” he said happily.
So who is buying these high-end homes? According to real estate professionals, “venture capitalists, tech money, oil and gas, developers, and CEOs.” There also appear to be a healthy number of foreign investors purchasing second homes and younger individuals making “aspirational purchases.” Real estate agents define “aspirational buyers” as those who are purchasing above their current lifestyle – and sometimes at the very outer edge of their means – in order to “grow into the person who would have a beautiful property like [these high-end homes]”.
By Carole VanSickle