Coconut Grove Is Looking For Millionaires…
May 17th, 2009 categories: Buying Real Estate in Coconut Grove
Calling all millionaires….Coconut Grove’s housing market anxiously awaits your arrival.
Looking to spend between $1,000,000 and $2,000,000 for a home in Coconut Grove? You are in luck, there are currently 70 homes for sale in Coconut Grove that are listed in that price range. The good news for buyers is that now is the time to be picky, the bad news for sellers is that it is harder than ever to make your house stand out.
So far this year, Coconut Grove home sales have not been kind to those who own a home priced $1,000,000 to $2,000,000. Coconut Grove has only seen 3 closed sales this year in that price range, and currently has 2 under contract. That is just under 5% in a price range that used to dominate the Grove. It was not that long ago that the average sales price for a home in Coconut Grove was significantly higher than $1,000,000.
Where have all the high end buyers gone?
This is the main question I get from the owners of my listings these days. Have they decided to spend far less for a home? Have they had trouble getting financing? Or have their 401ks taken such a hit that they are no longer in a position to buy such an expensive home. We all assume that in this economic downturn the rich are not as affected as everyone else. This assumption obviously has proven to be wrong, and perhaps they are even more affected.
The problem we are seeing in this price range is that financing is difficult to obtain and expensive to own. Until recently, most banks were requiring 30% down for a Jumbo Loan (anything over $417,000). When you consider buying a $1,500,000 home, you are talking a down-payment of $450,000 with closing costs of roughly $50,000. Not many people have $500,000 cash to invest in their home in today’s environment. Also, the rate on a Jumbo loan is significantly higher than the rate on a conventional loan. Banks today are still scared to lend that much money on one piece of property. Until we see the lending guidelines start to loosen up, it may be a long summer for those who are trying to sell their homes listed between $1,000,000 and $2,000,000.
A Glimmer Of Hope
With the recent upturn in activity we have seen here in Coconut Grove, a lot of the good houses that were listed just below $1,000,000 are starting to go under contract. As this inventory comes off, buyers will be forced to move up in price to find the house that suits them. Also, I have heard from a few LOCAL lenders that they are now doing Jumbo loan financing with only 20% down. However, the buyer must be very well qualified.
If you are looking to buy or sell real estate in Coconut Grove, send me a note here or give me a call at 305.342.1623 and I would be happy to help you.
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