Luxury Homes Market Again Treading Water
November 15, 2007
Sales of previously owned DFW luxury homes rose 1.1 percent in October, 180 homes this year versus 178 homes a year ago. Additional sales that have not yet been reported are likely to push this slight increase in monthly sale volume even higher. Such belatedly reported sales resulted in September's previously reported increase of 1.7 percent being revised up to a 4.6 percent increase.
Though determining the rate at which prices paid for DFW luxury homes decreased between October of this year and last year is a bit complicated, for the second straight month home prices fell. Using the calculation methodology of comparing the normalized square foot prices of all homes sold during these two months, which usually is employed, returns an annual average price decrease of 4.6 percent. However, a review of the luxury homes sold during October 2006 showed that an unusually high percent of the properties that sold for between $500,000 and $1 million were small, older houses that have been, or probably soon will be, torn down and replaced with newly constructed homes. This caused the average per square foot prices to be abnormally high.
Comparing the October 2007 average square foot price of homes in this price range with those paid for similarly priced homes sold during September through November 2006 results in a .6 percent average price decrease. This probably is fairly close to annual percentage at which average luxury home values across the metroplex actually decreased.
The number of DFW luxury homes listed for sale finally broke through the 2,400 homes floor above which it had remained for the previous five months, according to data compiled by North Texas Real Estate Information Systems Inc. At the end of October, 2,360 homes were available for sale, up 18.3 percent from the 1,995 homes that were available the same time a year ago. While this rate of increase in inventory is still high, October marked the sixth straight month it decreased on a same month, year-to-year basis.
The supply of existing homes listed for sale, relative to October sales, was 13.0 months. This is down slightly from September's revised 13.1 months supply, but still represents a 18.1 percent increase over the 11.0 months supply of DFW luxury homes that were available for sale during October last year.
As would be expected, given the mix of luxury homes sold during October 2006, the weighted average square foot price for homes sold for $500,000 up to $750,000 during the three months ending in October 2007 was $155.54, a 2.4 percent decrease from the price at which similar homes sold during the same period last year. Homes priced at $750,000 up to $1 million sold for an average $199.08 per square foot, down 1.3 percent from a year ago. The square foot price of homes selling for $1 million up to $1.5 million increased to $250.44, up 4.2 percent. Homes selling for $1.5 million up to $2 million, with an average price of $300.39, were up 7.2 percent. The largest increase in weighted average square foot price was for homes selling for more than $2 million. The average square foot price of these homes increased 9.0 percent.
Average time on market of homes that sold during October was 80 days, up 5.3 percent from the revised 76 average days needed to sell a DFW luxury home in September, and 4.2 percent more than the 77 average days that sales of similar homes required during October a year ago.
Market Highs And Lows
The DFW luxury home enclave with the largest annual increase in its three month rolling average prices was the Fort Worth / Arlington area, which experienced a 9.6 increase. The North Dallas enclave, where average luxury home prices increased 6.0 percent, was next highest.
Two DFW luxury home enclaves experienced a price decreases. The South Denton County area saw the largest decrease, falling 2.6 percent. Homes in the Southwest Collin County / Southeast Denton County on average sold for 2.2 percent less than during August through October last year.
The enclave with the least inventory, the Park Cities, saw its supply of luxury properties listed for sale increase from 7.5 months in September to 9.5 months during October. The North Dallas area had the second lowest inventory with 9.8 months supply of homes for sale.
The South Denton County area, where the supply of luxury homes for sale ballooned to 20.4 months, had the largest inventory. The Fort Worth / Arlington area had the second highest level of inventory, with a 20.0 months supply of pre-owned luxury homes available for sale. |
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