Luxury Home Market Stays Strong

There sure isn't much positive news in the housing sector. So why are ultra high-end home prices still rising, with some prices reaching up to an astronomical $175 million? Newsweek addressed this oxymoron in its latest issue.

It's a simple matter of supply and demand, say brokers from hot markets like Manhattan, the Hamptons, Palm Beach and both ends of California. While there's a national glut of McMansions in the $500,000 and up range, there's a shortage of trophy properties on the market and an increasing number of wealthy foreign buyers from Asia and Europe looking to capitalize on the weak U.S. dollar.

Those struggling to pay their monthly mortgage or buy a first home may be envious or appalled, but according to market data from DataQuick, sales for homes costing $5 million and above climbed 31 percent in the first quarter of 2007 compared to the same quarter in 2006. Sales of Manhattan apartments costing $10 million or more tripled in 2007, according to the real-estate company Prudential Douglas Elliman. How rich are these buyers? The brokers NEWSWEEK spoke to say many of their high-end sales represent the purchase of a second, third or fourth home. The bottom line? The rich are even richer than ever before and the very wealthy are pouring more money into residential real estate.

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