Apr 29

$40 Million Homes Spark ‘Copycat Effect’

$40 Million Homes Spark ‘Copycat Effect’

$40 Million Homes Spark 'Copycat Effect'. Image courtesy of franky242 / FreeDigitalPhotos.net

$40 Million Homes Spark ‘Copycat Effect’. Image courtesy of franky242 / FreeDigitalPhotos.net

Homes prices at $40 million or more were almost nonexistent up until a few years ago. Now, the nation’s priciest homes are selling for well above $100 million, and listings and sales at $40 million are surfacing across the country, The Wall Street Journal reports.

“We’ve had this creation of a new market category unlike anything that’s ever been seen before,” says Jonathan Miller of Manhattan-based Miller Samuel Real Estate Appraisers. “Five or 10 years ago, a $40 million sale or listing was an outlier. And today it’s almost commonplace.”

More than 300 homes were for-sale over the past year priced from $35 million to $49 million – a 24 percent year-over-year increase, according to Trulia real estate data.

Several factors are behind these “super-luxury home sales,” says Miller. He cites the creation of global wealth since the economic downturn, demand from overseas and domestic buyers, and the “copycat effect.”

When big-ticket sales occur on the market, they tend to generate a copycat effect where other sellers place their homes on the market believing they can also fetch ambitious prices, Miller told The Wall Street Journal.

Still, “the vast majority of homes over $5 million don’t fly off the shelves the way people want you to believe they do,” says Leonard Steinberg, a real estate professional with Compass. Steinberg is co-listing a townhouse that was originally listed in October for $48 million, and is now priced at $46 million.

More buyers may be willing — and able — to pay for homes in the $40 million price range today than there used to be but these buyers still tend to be very particular in what they want in their home, Steinberg says.

“People take their time at this price level,” Steinberg says.

Source: “The New Price of Luxury: $40 Million,” The Wall Street Journal (April 23, 2015)

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