Once upon a time, we whispered about the “F” word creeping into luxury real estate. These days, it is common real estate talk.
The Wall Street Journal quotes Realty Trac reporting that the number of $1-plus million homes in some stage of foreclosure has ballooned to 7,968 between January and August this year. This compares to 4,214 during the same months last year.
Within these numbers, it is interesting to note the relative surge in the $2-plus million home market. This luxury group has grown the fastest: How about 499 in foreclosure process, compared to 201 for the same period last year.
These luxury foreclosures aren’t just the McMansions that proliferated in many upscale suburban communities. These homes are waterfront, behind exclusive gated communities, and in tony towns where these financial embarrassments rarely occur.
The bargains abound. The luxurious Bradenton, FL home pictured above (and listed by Patricia Tan with Prudential Palms Realty), for example, was originally listed at $3.78 million and is now under contract for $1.1 million. There again, and according to DataQuick, more than 64,300 homes priced at $1million or more were sold in 2007–which is more than triple the number for 2002.
In our local San Diego luxury real estate market, we are seeing our own casualties. According to our stats, there are 34 homes in some state of the foreclosure process in exclusive Rancho Santa Fe–with one on Via De Santa Fe valued at over $12 million. In La Jolla real estate, where prices are equally high, but with more condos and a greater population, there are 118 properties in the throes of foreclosure.
What will be the consequences to the highest end of the luxury market? There will be some fallout–and perhaps a more robust luxury home rental market, but most of these owners are well-entrenched and funded–and can afford to wait out this market crisis.
And for luxury home buyers, the market hasn’t looked this good–or offered so many choices– in several decades.
For more, read:
The Finest Foreclosures – WSJ.com
Rise in Luxury Home Foreclosures, REO’s and Short Sales?
California Luxury Home Foreclosures
Roberta,
It appears that no one is exempt these days from foreclosure. The number are not high but there certainly is quite a savings for the luxury home buyer who is anxious to purchase a luxury home at a great buy.
Yeah, we’ve had several luxury foreclosures in our area. There are currently 8 foreclosures active or pending over $500,000 in Winston Salem, Greensboro and High Point.
Great article. I previewed some luxury foreclosures in the Colorado Springs area yesterday, some in great shape some in horrible shape.