The luxury real estate market has indications that it is softening, but prices are going steady. Overall, the new Treasury LLC disclosure ruling has threatened to slow down the progress of the high-end real estate market.
According to The Real Deal, Leonard Steinberg, president of Compass, and Krishna Memani, Oppenheimer Funds executive, already saw the slowing down of the real estate market, where luxury properties are staying much longer on the market which created a lower sales volume.
While the luxury market is still in the right direction, there has been a reality check on prices for sellers with "unrealistic" and "crazy prices," said Steinberg. He has learned that price adjustments are reaching various levels in the high-end market.
However, the Oppenheimer Funds executive has said that the strength of the real estate market will depend partly on millennials, currently living at home, and who may soon move out and get their own homes. Millennials are looking for homes under $3 million, said Steinberg.
The two leaders also discussed the recent effort of the federal state in identifying people who are purchasing Manhattan properties anonymously through limited liability corporations. Compass doesn't believe it will make any problem with elite buyers.
As reported on the Realtor Magazine, real estate buyers are overly optimistic about the value of their homes, as found out by the new study. According to a published report in the Journal of Housing Economics, home owners are overestimating the value of their properties by about eight percent.
The overvaluations of the property are often made by owners who miscalculate their estimates over the capital gains they've accumulated in the home. This echoes similar findings from a recent survey conducted by Quicken Loans, where they found a "widening gap" between what the home owners think to be the worth of their home and the actual valuations of the appraisers.
Appraisers have also noticed that home owners don't realize that they have over-improved their homes compared to others in the neighborhood, which lead them to overestimate their home.
