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Thursday, January 24, 2013

Luxury home sales soared in final months of 2012

Sales of luxury homes spiked in the final months of 2012 as high-end homeowners rushed to take advantage of lower tax rates before January 1.

According to the National Association of Realtors (NAR), sales of homes valued at $1 million or more spiked 51% in November compared with a year earlier.

Looking ahead, all those rushed deals could mean a slight slump in high-end sales early in 2013. Not only will buyers be in shorter supply but the inventory of luxury homes has dropped precipitously.
But I think the drop-off will be short-lived. Historically low interest rates should continue making the long-term cost of buying these homes attractive to buyers. In addition, foreign buyers continue to invest in U.S. properties and many domestic buyers are starting to come off the sidelines now that home prices are starting to recover.

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