Luxury Home Short Sales in Raleigh Grow in Importance

The luxury market is facing increasing pressure, aggravated by credit market difficulties in the jumbo mortgage market. As a result, The National Association of Realtors reported that the share of home sales above $750,000 has fallen from 4.4% of total home sales in 2007 to a projected 2.3% of total sales in 2009 (NAR Projection based on partial year statistics).



Limited loan availability, higher than usual interest rates for jumbo loans (from 150 to 200 basis points higher than conforming loan rates), and stringent loan qualifying requirements have slowed sales of luxury properties. This has caused the national inventory level of homes priced above $750,000 to rise from 18 months worth in 2007 to more than 40 months worth as of the second quarter of 2009.



The lack of refinancing opportunities, fewer qualified buyers for luxury homes, a growing inventory of unsold luxury homes, and an economy in recession are all creating the "perfect storm" for luxury homeowners who need to sell and can’t. NAR also reported that as of October 2008, the foreclosure rate on jumbo loans was more than double the rate on conforming loans.



You can expect to see growing numbers of luxury homeowners in default. These consumers not only need your help. They represent an important opportunity.



Some of these homeowners will qualify for short sales and debt relief under the government’s new programs (see Making Home Affordable Fact Sheet: Foreclosure Alternatives and Home Price Decline Protection Incentives PDF 50k), others will have high mortgage balances, which will exclude them. However, the chances are good that servicers doing Short Sales outside of the new government programs will follow the same basic process and paperwork utilized in government programs. Knowledge about these programs will be necessary for some luxury Raleigh Short Sales and to your advantage in others.



Rodney McNabb is a part of a team of Raleigh Realtors that offer services in Raleigh Property Management and Raleigh Short Sales