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What are Cape Cod luxury homes all about?
There isn’t one style or certain size home that makes it a Cape Cod luxury home. However, when you see a luxury home, there is no question in your mind that you are looking at one. Take a look at the most expensive homes on Cape Cod at Cape Cod Luxury Homes currently for sale. Whether you’re a year round resident or a summer visitor, you can’t help but notice the number of luxury properties on Cape Cod. The Cape is a beautiful destination, which makes it the ideal location for expansive dream homes. These waterfront high end properties can be found in the dunes of Truro, facing the bay in Brewster (Brewster Luxury Homes) or overlooking the harbor in Chatham.
Over the last few years when the housing market has made its slow but steady rise, the luxury home market has been booming. The United States is not the only country seeing this increase in the sale of luxury homes. Canada, Japan and Ireland are among the many countries that have seen a price increase in their home prices and an increase in the number of luxury homes sold in recent years. What has happened to make this specific market see such an increase in recent years and what are some challenges associated with this market?
Why Are More People Buying Luxury Homes?
It does not seem to make sense why the luxury market would rebound so quickly from the 2008 financial crisis when much of the world is still recovering from that crash. However, similar to financial markets, the law of supply and demand applies to the real estate market. The inventory of luxury homes is low, increasing the demand for these properties. The more people interested in a property, the higher the price becomes because the perspective buyers try to outbid one another.
In addition to the supply and demand law, a strengthening job market is contributing to the luxury home market increase. Areas such as Denver, Colorado have seen a jump in the market because of the low unemployment rate and availability of well-paying jobs. In 2013, the luxury home market (which makes up the top 10% of the market), saw a 44% increase in the city of Denver.
International buyers also contribute to the surging luxury home market. From April 2012-May 2013, international buyers made up 6% of total sales in the United States. Buyers from overseas tend to buy more expensive properties than domestic buyers. The average domestic sale is $228,000 while the average international sale is $354,000. The majority of international sales are all cash offers, due to tight credit standards in the United States. This tends to make it difficult for domestic buyers to compete with because all cash offers tend to move more quickly which is more appealing to sellers because they do not have to wait for financing. This creates a situation where a domestic buyer may have to raise their offer to make themselves more appealing than the all cash international offer.
What Are The Challenges Associated With Buying Luxury Homes?
Many high end homes are not listed on MLS search engines. This could be due to the home owners wanting to keep their address and identities a secret or to keep their homes from being vulnerable to theft because of its vacancy. This is a huge challenge for the seller because it is estimated that 43% of recent buyers found their home on the internet. The National Association of Realtors published a 2013 Profile of Home Buyers that said that 9 out of 10 home buyers used the internet while looking for a home at some point of their search. For the homes that are listed online, taking flattering pictures of the property can be challenging. Due to the size and number of features in the home, it is difficult to capture it all in a couple of pictures. If the right pictures are not picked to be displayed on the real estate search engine, buyers will not check out the property.
So how do you find these luxury homes if you can’t find them online? You need to enlist the help of a qualified real estate agent whose specialty is in luxury real estate. What sets these agents apart from other real estate agents? Most agents rely on comps (or comparable homes to the one that you’re looking to buy in your area) to price a home for the real estate market. However, most luxury homes do not have properties comparable to them due to the different amenities, features and the size of the home. This is a huge challenge for real estate agents unless they have experience in the high end real estate market. Let us help you find out How Much Your Cape Cod Luxury Real Estate is Worth. These agents are aware of listings that are not on MLS or real estate search engines. Word of mouth between these real estate agents is how buyers learn of exclusive properties that are for sale.
Purchasing one of the most expensive homes on Cape Cod can be a challenge for buyers who are looking for financing instead of doing an all cash transaction. It takes time to be approved for any sort of financing for a home, but it takes a lot longer to secure financing for a high end property. Typically, it can take 45 to 60 days to get approved. For this reason, if you are thinking about purchasing a high end property, make sure you have your finances in order ahead of time. It is recommended that you have your mortgage broker, personal banker or loan officer secure approval of your finances before you find the house of your dreams to make things move smoothly and quickly. As with any property, it is important that you thoroughly inspect your investment. Since the property is larger than the typical inspector works with, it is important to find a qualified inspector to check the property as well as specialists for the different amenities the property might include. These special features could include amenities such as fountains, pools, security systems, fire pits and automatic awning systems just to name a few. A luxury home comes with an enormous price tag, the buyer needs to make sure that the home is in good working condition.
In the last couple of years, the luxury real estate market has seen tremendous growth. This is due to international deals, an improving job market and supply and demand despite the challenges associated with buying in this market. As with any real estate transaction, it is important to do your homework when considering purchasing your luxury dream home.