Luxury Market 'Not What It Was'

August 3, 2016

The power may have shifted in the luxury housing market from sellers to buyers, who now appear to have the upper hand in negotiations, MarketWatch reports.

Jed Garfield, president of Leslie J. Garfield & Co. in New York, says the luxury sector started swinging toward a buyer's market in late 2015, when properties listed at fair market prices were lingering. But now the power shift has become more pronounced, he says.

"The market is not what it was," Garfield told MarketWatch. He says there is an expectation among home owners that prices will rise 3 percent to 5 percent per year, but buyers in the luxury market aren't tolerating that anymore. "You'd be very hard-pressed to find anybody who would pay more than 2015 prices today," he added.

Jay Heiselmann of real estate firm Compass in Brooklyn, N.Y., says he's noticed buyers in the $3 million to $5 million range getting choosier and more interested in negotiating with sellers than they have in the past.

Some markets facing severe inventory woes, such as Manhattan's West Village or Beverly Hills in Los Angeles, have mostly been immune to any big price cuts. "It all comes down to this being a supply-and-demand story," Dolly Lenz, broker-owner of Dolly Lenz Real Estate in Manhattan, told MarketWatch. "If you have a prime property in a great location — something that's irreplaceable or a trophy property — it is still a very strong market."

Source: “Top-End Real Estate Is at a Tipping Point From Seller’s Market to Buyer’s Market,” MarketWatch (July 30, 2016)