Pasadena Luxury Home Sales Lag Market

Sales of Luxury Homes in Pasadena, those that make up the top 10% of home sales have declined again during the second quarter of 2016. Although the declines are not dramatic, it does seem to indicate a softening in the higher end market. Pasadena Luxury Homes

During the second quarter of 2016, sales of all Single family homes declined by 40 units or 14%, but overall median home prices rose to $879,000, up 10% from the previous price of $800,000 just one year ago.

The Luxury Market, homes in the top 10% of home sales showed a decline in both units and in median price. Also the luxury threshold, the price in which we begin to track this segment also fell from $1,910,000 last year to $1,836,000 this year. Also empirical data seems to suggest that we are seeing more homes in this category expire and come off of the market unsold.

Why the Slow Down

You can’t blame it on interest rates, from the enclosed chart, interest rates for the second quarter in 2016 were lower than they were in 2015.

With prices flat or slightly declining, there cannot be any immediate effect on demand.

Therefore it must be a fewer number of buyers in the marketplace. There has definitely been a decline in the money coming in from international buyers and the purchasers evidently are opting for the less expensive properties.

This data correlates with the analysis I produced with regard to the 1st Quarter Pasadena Real Estate recap, which indicated price appreciation in the more affordable Pasadena zip codes of 91104 & 91107.

The Outlook for Luxury Home Sales

With an election looming, you can guess that things will stay status quo through the end of the year. With several years of increased equity and
rising appreciation, the market is due for a breather and the time out usually starts with the most prestigious properties.

Most predictors seem to indicate the current conditions in the real estate market will last for another 1 to 2 years at most. But then again, you can find and believe whatever you choose. That’s why it’s called a cycle.