“Existing sales above $1 million were down a bit in July. This was in large part due to the stock market volatility seen earlier this summer leading up to and immediately after Brexit,” said Lawrence Yun, chief economist for the National Association of Realtors. “The financial markets have stabilized since then.”
Luxury prices in the Hamptons, New York’s swankiest vacation venue, fell 2.3 percent in the second quarter from the year-earlier period, but sales rose by more than 20 percent, according to Miller Samuel. That market is highly sensitive to the stock market, which swooned at the start of the year and then saw a volatile summer thanks to the Brexit vote.
While very high-end buyers don’t rely much on financing, those in the $1 million to $2 million range do, and there may be some growth in that segment. An estimated $101.0 billion in jumbo mortgages were originated in the second quarter of 2016, up 31 percent from the previous quarter, according to Inside Mortgage Finance. Through the first half of 2016, roughly $178 billion in jumbos were originated, a 7.9 percent increase from the first half of 2015.
Luxury home builder Toll Brothers did report better-than-expected quarterly earnings in its last fiscal quarter, citing robust sales and new orders. The average price of a Toll home is around $850,000. Toll has benefited from very good land positions compared with other public builders seeking to sell to the luxury buyer. More builders now are finally moving away from pricier homes, seeing far more demand at the entry level, where supply is tight.
“We’re seeing very robust activity in the entry space and the middle of the market, but we’re not seeing it at the top,” Miller said.