Why a Villa Should Be Your Next Home
There is no one building style or size that defines what a villa is. In common parlance, any large, independent luxury home can fairly be called one. Real estate majors who specialize in luxury homes define one as anything in the top five pricing percentile.
In the past few months, sales of luxury villas valued at over $1 million have slowed down across the country. While the prices of middle-class homes have risen by nearly 5%, the top end of the market has slowed down for the first time since 2009. To be certain, experts do not view this downturn as permanent, or even long-term. They fully expect it to pick up again before long. This makes the current moment an excellent opportunity to purchase new villa homes.
How long will the window stay open?
The current slowdown was brought about by a number of factors.
An unusually strong US dollar: America’s luxury real estate is supported by buyers for the Far East and the Middle East. Now, however, exchange rate fluctuations mean that these buyers from other countries need to pay between 14% and 27% more than they used to.
A volatile stock market: It is customary for high-end buyers to primarily invest in stocks. When they need to invest in luxury real estate, they cash in some of their portfolio. The first half of 2016, however, has seen some serious volatility in the international stock markets. The rich simply have shallower pockets now to draw on.
Oversupply: In January 2016, luxury home builders reported very high inventory of 71,000 unsold homes priced above $1 million. Unsold inventory for homes over $5 million was up 13%. Prices have been falling ever since, as a result. In Austin, Texas, homes previously listed at $14 million have sold at half the price.
Typically, imbalances in the financial and stock markets do not last very long. Then, market rates itself.
Taking advantage of a favorable market
It’s only a matter of time before luxury homes sales regain their long-standing momentum. At the moment, it’s possible to catch the market at a lull. There are surprising bargains available from markets that used to be extremely strong in the past. Before long, it’s an investment that’s likely to handsomely repay the investor.