Home » News » Sales of million-dollar properties are softening in the US

Villas, penthouses with private pool and a garden is something that every man wants to own. In spite of that, these properties are at hold in the seller’s list. It is something that is not certainly to be expected in a high economically developed country like the US. The reason behind it is the high price of the properties.

Reason behind the softening of million-dollar property sales

Even after being spacious and embellished, located in posh areas like Miami, New York, San Francisco; these highly priced properties are not attracting enough investors. Some possible reasons causing a drop in real estate market for these million dollar mansions are:

  1. High currency value

Foreign investors are not likely to buy or engage money in such expensive properties. This is because of the high currency value of USD.

Suppose a buyer from Australia, is willing to invest in a mansion property. Considering, countries’ currency values; 1 Australian dollar is equal to $.77 US dollar. So when they are planning to invest in a property of 1 million USD, to him, it will cost around $1305057.10 AUD. This is a primary reason why people are not buying such expensive properties.

  1. Luxury apartments are taking over

Real estate dealers are more likely to invest in luxury apartments and small houses. This is the new trend because of the market demand. These following reasons caused the market hype for luxury apartments in the US:

  • Low maintenance cost
  • More security
  • Mostly located at prime locations
  • Easy access to market, hospital, transport and emergency needs
  • Less property tax annually

Most importantly, there are duplex apartments available which provide ample space as well as cost almost half than an exclusive property.

  1. Mortgage interest rate

The US banks charge a very affordable interest on real estate loan as the Federal Reserve increases just .1% loan interest every year. This sounds cheap, and it certainly is. Now, the point is, the interest entirely depends on the amount of loan a buyer is demanding from the bank.

  • When applying for a mortgage to buy a million dollar property, banks are not very certain of investing a lot of money gets involved.
  • If they are taking money from real estate market, then there is an effect on overall financial as well as stock market.

Present day million dollar property sale chart

From the previous four years, the property prices surge has started falling for expensive mansions and villas.

  • 4% of price fell for luxury properties in Bellevue
  • 11% of sales drop in San Francisco
  • 12% of overall sale drop in all over the country for million dollar properties in 2015

Sale rate of expensive mansions is steadily dropping every year. In 2016, till now there is no surge in selling of million dollar property dealing rate. It is more likely to remain the same seeing the present market scenario and kind of real estate demand among buyers and foreign investors.