“It’s mind-boggling,” said Billie Duncan-Hart, president of Dayton Realtors. “I’ve been doing this 29 years and I haven’t see a market like this.”
Prices for luxury homes have skyrocketed nationwide to previously unreached heights in the past two years amid a robust stock market, low interest rates, and a COVID-era focus on home life.
But “because of those price increases in the past couple of years, what you are getting for your money is absolutely changing,” Duncan-Hart said. “The low inventory that we are experiencing is not helping the situation.”
To emphasize that low inventory, Duncan-Hart cites a client who sold their luxury home five years ago for around $650,000 before moving out of the area. Now looking to move back into the region with a budget of $850,000, they’re continuing to come up short when it comes to finding a home.
“There’s nothing out there at the moment for me to show them at $850,000 that is even comparable to the luxury home of theirs I sold five years ago,” she said.
Years ago, a home that cost $1 million or more typically could sit on the market for four to six months, just because the pool of buyers that wanted or could afford to purchase at that price range was so small, Duncan-Hart said.
That is no longer the case.
“I’ve had three listings in the past 16 months (that were) all at $1 million and over that have sold just like that,” she said.
A 4-bedroom, 4-bathroom, 5,121-square-foot custom-built home in the 8200 block of Turning Leaf Crossing in Clearcreek Twp. sold for full price at $975,000 in just five days last year with multiple offers on the table.
The amount of homes selling for $700,000 and more in Montgomery County went from 28 in 2020 to 50 in 2021, according to Dayton Realtors.
But in smaller Warren County, homes in that price range went from 42 in 2020 to 78 in 2021.
More homes are selling in the $700,000 price range in Warren County in part because of lower real estate taxes there, according to Duncan-Hart. The owner of a million-dollar home might pay approximately $12,000 in taxes each year there as opposed to the owner of the same-priced home in some Montgomery County jurisdictions paying about $20,000 a year, she said.
Homes also are selling at a greater amount in Warren County because of a newer stock of inventory and the proximity between Dayton and Cincinnati, she said.
Warren County Auditor Matt Nolan said homes thought of by some as “starter homes” are often now priced in the $500,000 range and are “by no means luxury” homes.
“They’re not high-end finishes or things we associate with luxury homes,” Nolan said.
And sales of higher-end, non-custom homes ranging between $600,000 and $900,000 are “incredibly hot” right now, he said.
It’s not that there are no less-expensive homes in Warren County. Listings on Realtor.com on Thursday included dozens of homes under $250,000, although a good chunk of them were listed as “sale pending.”
Price increases for homes across the region are “a tale as old as time,” one that applies to almost everything, Duncan-Hart said.
“It is supply and demand,” she said. “We have no inventory and it’s not that people don’t want to sell. I have several people who are saying ‘I’d let you sell my house, but where am I going?’”
Once there’s a greater supply, whether by home builders constructing more homes or by more homeowners putting their houses on the market, prices will “level out some.”
But Duncan-Hart said she does not believe they ever will return to the levels they were at in 2018 or 2019
“The problem is, people are willing to pay these higher prices for real estate because they have no choice,” she said. “There’s nothing out there.”
While there’s no set industry standard of a price point defining a luxury home sale, the $700,000-and-up range typically includes better quality homes and more amenities, Duncan-Hart said.
Those buying luxury homes are usually in their mid-30s and older, she said.
“They’re already homeowners, they’ve outgrown (their home), their kids are getting a little older and closer to going to school and they want a bigger home before their children start school, so they can lay down some roots,” Duncan-Hart said.
Those searching for such homes primarily find them these days in Springboro, Centerville, Washington Twp., Oakwood, West Kettering, Beavercreek, Bellbrook and Sugarcreek Twp., Duncan-Hart said.
But amid shortages of homes there, building new ones isn’t the easiest solution because of the soaring cost of real estate and construction materials, plus longer waits for completion amid supply chain disruptions, she said.
Interest rates going up, as predicted, may mean some younger home buyers won’t pull the proverbial trigger on a home purchase as high in price as they could have spent with existing historically low interest rates.
When it comes to luxury homes, the overall square footage isn’t as important as the location, the quality of the construction and the amenities one is getting, she said.
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