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Not enough mansions for the rich

By Judy Martel · Bankrate.com
Monday, June 24, 2013
Posted: 6 am ET

Improving home values and a soaring stock market are making the rich richer. But those looking to put that newfound wealth toward moving into a ritzier ZIP code are hitting a snag: a lack of mansions on the market.

Demand for luxury homes is soaring, but inventory is dropping.

Demand for luxury homes is soaring, but inventory is dropping.

Altos Research reports that in the nation's 90 wealthiest ZIP codes, the supply of for-sale mansions fell at a faster rate over the past year than it did in the broader market, according to a CNBC article.

It's even worse in the richest areas of the country, where inventory plummeted by 50 percent. In Carmel, Calif., for example, there were only four mansions priced at $1 million or more on the market at the end of last month. Inventory is down 76 percent from a year ago in that ZIP code.

Other traditionally exclusive areas are seeing a similar dearth of pricey real estate. In Old Greenwich, Conn., only 10 homes priced at $1 million or more were on the market at the end of May. A year ago in Palm Beach, Fla., there were 89 homes on the market priced above $1 million, according to Altos Research. Last month there were 26.

David Ogilvy of David Ogilvy & Associates in Greenwich, Conn., told CNBC that one of his listings, a $1.38 million mansion, sold in two days after being viewed 14 times. "The Old Greenwich market right now is just super-hot," he said.

Buyers are coming to wealthy ZIP codes from other states, Europe, Asia and Latin America. Not all are looking for a primary residence -- some are seeking luxury second homes.

Rick Sharga, executive vice president of Carrington Mortgage Holdings in Santa Ana, Calif., says there are more move-up buyers than first-time buyers in the market for homes, and that means more demand for larger homes.

Lack of inventory is also bringing back bidding wars on homes in some desirable parts of the country, he adds, estimating that 70 percent of the homes sold in California recently have had multiple bids. Investors are also driving competition for property. Homebuyers will have to be vigilant and patient, he says, if they want to live among the rich.

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1 Comment
J Hart
June 26, 2013 at 1:44 am

Looks like to Me the rich better stop thinking there rich
Can You say worthless paper? I bet You can!