14 March 2018

As a rule, the luxury market isn’t affected by stricter mortgage qualification rules and higher interest rates. And although those changes can explain the slowdown in other segments of the market, expensive homes are still sold quickly.

“Today, the market demand exceeds the supply, so home prices keep rising. Nevertheless, this sector doesn’t usually deal with fluctuations like the rest of the market. We’re talking about very wealthy people who can withstand the hit. New listings and well-kept renovated properties in the luxury market are selling quickly. Meanwhile, there are a lot of dated properties at the market.”

Another reason why the annual sales decline is quite misleading, according to Alexander, is the abnormality of the previous year.

“Last year was abnormal,” – he noted. “If we see extremely high sales and next year the market slows down, the comparison will be drastic, so let’s just ignore 2017.  We saw a sharp price increase in Q1, then a significant drop in the following two quarters, and even in November and December home sales were up 20% annually. Let’s cross 2017 out, as it was not normal.”