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Fallbrook luxury market sees significant drop in sales from 2015

Luxury homes have dropped in sales in the greater Fallbrook area this year in comparison to the luxury home market last year.

According to the comparative market analysis (CMA) summary report, 31 homes priced at over one million dollars were sold in 2015. In the first six months, 20 luxury homes sold, with the other 11 homes sold in the second half of the year.

In 2016, as of June 6, 58 homes over a million dollars were on the market, but only four homes had been sold at that point, with nine homes pending sales.

Upon looking at the numbers for the current homes in the luxury market, Chris Murphy with Weichert, Realtors Murphy and Murphy began to question why homes in the luxury market have not been selling.

“We have 60 months of inventory market,” said Murphy. “If nothing moves, we have to sell one a month for the next five years.”

Murphy stated that homes within the $400,000 to $800,000 are moving rapidly.

“People purchasing homes in the $400,000 to $800,000 range have great jobs,” said Murphy. “They have the means to make repairs as needed, and [when they are ready to sell their homes] the homes are market ready. They are not strapped financially.”

Murphy believes the biggest problem with the luxury market is individuals who are not looking to purchase larger homes.

“Individuals are looking to purchase laterally, or to downsize,” said Murphy. “Buyers can’t move until they sell their house. In nine years, executives have not gotten raises; they are happy to have a luxury job.”

Jeanne Stuart, a Realtor with Coldwell Banker who also sells high end homes in the greater Fallbrook area, agrees that selling homes has been difficult in the luxury market.

"It all depends on what people want,” said Stuart. “They are buying a lifestyle, and some think they want this type of lifestyle. Many think, ‘Is this the lifestyle I want?’”

Homes that have been purchased over a million dollars have been under the $1.5 million mark, said Stuart.

“People want acreage, they want a view, and they want a single story,” said Stuart. “Most people buying are retirees and want single level homes.”

In addition, Stuart found that the estimated cost per square footage for homes purchased and the actual cost per square footage had a significant difference. In addition, the homes sat on the market for significant time, ranging from a few days to 1,775 days.

“This is not the coast, or even Poway,” said Stuart.

Another concern that some might have is the fact there is no local hospital, said Stuart.

“That’s a problem,” said Stuart. “Many are actually retiring, and you have to tell them the nearest hospitals are in Temecula or Palomar Pomerado, which is top drawer. We have people coming from different areas, like the OC, out of state, Los Angeles, and Pasadena. To them, this is the country. They want all the amenities available but they comment when they hear a car. We aren’t just selling properties; we are selling a lifestyle.”

According to Murphy, the luxury market might not seem like it has an impact on the regular market, but it does have a trickle down effect.

“People who buy in the luxury market are usually the people eating in the restaurant, who buy cars, and who create jobs. They hire contractors and landscapers,” said Murphy. “We need them to make it work. If the people in this market aren’t spending, it’s less work for those who are contractors and subcontractors.”

 

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