LOS ANGELES (AP) — In an exception to Southern California’s lackluster real estate market, sales of homes costing $2 million or more are hitting record levels, according to a report.
At least 1,431 homes worth $2 million or more were sold in the six-county region during the third quarter, said the Los Angeles TimeS, citing figures from CoreLogic DataQuick. That’s up 14 percent from the third quarter of 2013 — and well ahead of any three-month period in the housing bubble years of the mid-2000s.
Sales worth $10 million or more are on pace this year to double their number from the heights of the housing bubble.
Low interest rates, a strong stock market and an influx of cash from overseas are boosting demand for high-dollar homes, the newspaper said.
The spike comes as the broader market has plateaued, with prices still about one-fifth below their pre-crash highs and sales at less than two-thirds their 2005 pace.
Selma Hepp, senior economist for the California Association of Realtors, said it reflects a housing market that is now moving at two speeds: fast for the high end, sluggish for the rest.
“It’s just a completely different story between the two segments of the market,” she told the Times. “Those who are doing well are doing really well.”
Drew Fenton, an agent who specializes in high-end homes at Hilton & Hyland in Beverly Hills, said wealthy international buyers are scooping up second homes and investment properties.
“Everything’s just more global now,” he told the newspaper. A decade ago “it was much harder to reach those people and they didn’t travel as much.”
Domestic buyers are encouraged by a surging stock market that has boosted portfolios. And risk-averse banks are more likely to offer lower interest rates and better mortgage terms to deep-pocketed borrowers than to cash-strapped first-time buyers.