Million-Dollar Home Sales Jump as Wealthy Return
Real estate has returned as a favorite topic of conversation at the pair of Starbucks coffee shops in Granite Bay, a Sacramento, Calif., suburb where the median income is double the rest of the state.
“When the real estate market was booming, people sat in Starbucks and talked about how much they paid for a house,” said Craig Moe, who in June bought a $1.2 million property discounted 25 percent from its sale six years ago. “Now, they talk about how little they paid and what a bargain they got.”
Home sales from Los Angeles to Charleston, S.C., priced at more than $1 million are gaining at triple the pace of the broader market, according to real estate research firm DataQuick Inc. Wealthy purchasers, helped by gains in equities, are diving into real estate a year after a recovery began in the housing market when less well-heeled buyers rushed to take advantage of record-low interest rates, said Susan Wachter, a professor of real estate and finance at the University of Pennsylvania’s Wharton School.
“The real estate recovery has been built on purchases by middle-class families, even though they haven’t been the ones to flourish during the recovery,” she said. “Now the economy is getting a vote of confidence from wealthy homebuyers.”
Sales of homes priced at more than $1 million jumped an average 37 percent in 2013’s first half from a year earlier to the highest level since 2007, according to DataQuick. Transactions priced at less than $1 million rose 11 percent in the same period to the highest since 2009, data from the National Association of Realtors show.