If you’re selling a luxury home, get ready to wait — and to accept below your asking price. High-end properties spent an average of 506 days on the market last year, or nearly one-and-a-half years, according to the latest Concierge Auctions report on luxury homes.
The report analyzed data from the latest full year, 2018 — specifically the prices of the ten highest property sales in 56 high-income areas across the country (including an additional 16 areas from last year’s report).
Concierge Auctions found that only 38 percent of these 560 high-priced properties sold within about six months (180 days) of hitting the market. Those that did sell faster than six months, usually sold within 81 days and commanded 88.09 percent of their listing price.
By far, though, the vast majority of luxury properties in these markets — 61.8 percent — took longer than 180 days to sell. A full 22.47 percent took between one year and 730 days, while 23.03 percent took more than 730 days to sell (more than two years).
The homes that languished on the market in excess of 180 days also achieved even lower-than-asking sales prices at 78 percent of the listing price.
The average luxury home sale price derived from analyzing all 560 highest-priced home sales was $12,219,014 — up 11.83 percent from 2017.
Meanwhile, looking at the middle of the overall market, an average-value home in the U.S. priced at $253,600 typically gets snapped up within 80 days.
“Luxury properties are difficult to value and sell,” reads the report. “There is a smaller pool of buyers, and they are often spread out over a larger geographic range.”
Some parts of the country also have more luxury buyers than others. An average luxury home in Palo Alto, California spends 86 days on the market but 1109 days in Florida’s Sarasota and Manatee counties.
What’s more, properties that are not immediately snapped up are prone to sell way below the listing price. Homes bought within 180 days typically see an 88 percent price drop while the average luxury home is sold for as little as 78 percent of the total price.
According to the report, there are many reasons why luxury homes will either sell fast or languish on the market. While the buyer pool is limited, those willing to shell out several million on a property generally also go for houses that are custom-built for them — such as rapper 50 Cent’s 52-room estate, which took more than a decade to sell.
“There is a point of inflection where real estate turns from necessary to discretionary,” reads the report. “Similar to other luxury consumption, once a home has been enjoyed and highly customized to its owner, it may be worth significantly less to the buyer.”