Luxury Home Sales Report December 2020

If you are buying or selling a home for more than $800,000, then your transaction falls in the “Luxury” end of the market.

When it comes to homes, luxury is often defined by lifestyle, location, amenities, land size, as well as the physical size of a home. In order to produce a report on the luxury homes market, I have isolated all home sales in the top 1% of the market, and that’s where the $800k price comes into play.

So how is the luxury homes market in late December of 2020, and where do we see it heading in the near future? 

These are the questions that we have answered in this month’s luxury homes market update.

Luxury Homes For Sale In Tallahassee

The following list of homes for sale includes all homes priced within the top 1% of the market.

Luxury Homes Sales Report (With Listings That Sold)

How 2020 Ranks For Homes Sold

The first graph in today's report was created from home sales in Tallahassee each year, beginning in 2003 and ending in mid-December 2020. That means all previous years include the full calendar, but 2020 still has two weeks left to go.

It ranks each home price segment from 1 to 18 based upon how well 2020 is performing (with a rank of "1" if 2020 has the most home sales down to "18" if 2020 has the fewest number of homes sold of all 18 years).

It's important to understand that each price segment includes all home sales from that price and higher, all the way to the most expensive home sale in 2020. So the easiest way to read this graph is from the bottom up.

We can see homes priced more than $1M are enjoying the best year ever (they are ranked #1). The same is true for all homes priced in to top 1%, as we see a rank of “1” that actually extends all the way to $200K.

Our next graph isolates the top 1% of the Tallahassee real estate market.

Luxury Home Sales Are Strong

If the pandemic is slowing the housing market, you certainly couldn't tell by looking at luxury home sales in Tallahassee through September of 2020.

Currently, homes priced above $800K are tied with 2018 as the best year ever. But we still have two weeks of closings remaining, and I believe by year’s end, 2020 will stand alone ranking #1.

When it comes to million-dollar homes, we again see the same number in 2020 as in 2018, and it will only require one more closing for 2020 to stand alone. I believe this will happen as well.

Why Are Luxury Home Sales Strong In 2020

You might think that luxury home sales are strong due to low mortgage interest rates, but that is not entirely the case.

The graph above shows the percentage of luxury home buyers financing their purchases. Even as rates have tumbled in 2020, we've seen a rise in the number of people paying cash for a luxury home.

The solid green line shows the percentage of people financing their luxury home purchases each year, and due to the relatively low number of purchases, the percentage moves around a bit.

In 2020, 26% of luxury home buyers paid cash, which is fairly normal. But when we look at the raw numbers, the twelve buyers who paid cash for their luxury homes represent the most cash purchases of luxury homes ever recorded.

This suggests that it is more than just low mortgage interest rates moving the luxury homes market. It's really hard to glean more information from the data because we're only looking at 0 to 12 cash sales in each of the past 18 years.

Luxury home sellers should take note. You are in one of the best markets ever for selling a luxury home. Buyers are out shopping. Both those with cash and those who are financing the sale. Take advantage of these conditions and get your home sold before market conditions swing in the other direction.

How Long Does It Take To Sell A Luxury Home?

The next two graphs require an extensive analysis of the MLS data to produce. Each compares all copied listing data to ensure that time on the market and initial asking prices are accurate.

As you can see, luxury homeowners that successfully sold were on the market a lot longer than what unaudited Realtor reports would show. The MLS allows its users to manipulate listings to always appear fresh, but the reality is that many have been listed numerous times. Our report scrubbed the bogus versions and compared the final sales date with the initial listing date.

As you can see in the graph, sellers who successfully sold with their first agent (green) this year took 9 months to sell, while those that sold with a second (or more) had an estimated sales date 13 months after their initial listing date.

If you are planning on selling a luxury home, make sure you pick an agent that will provide an accurate valuation of your home and get you sold for top dollar. There is no reason to spend years on the market with no viable chance to sell your home.

How Much Are Luxury Home Sellers Receiving?

When we compare final sales prices to initial asking prices, it's fairly obvious the luxury home sellers are not getting the price that their agents said they should expect.

Look at the range between fresh and stale listings. From 81% for sellers using the second (or later) agent to 94% for agents who successfully sold with just one agent.

It's clear, selecting the right agent is typically worth more than 10% to your bottom line (a six-figure difference for this group of homes). Don't let a discount agent fool you, the few percent you save on fees ends up costing you a whole lot more.

Luxury Homes Sales In Tallahassee

The following table shows all luxury homes sold in Tallahassee going back to 1991. You can sort the table by any field in the table heading.