Categorized | Residential

Luxury Home Market in Alabama Continues to Struggle

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While the real estate market as a whole has performed poorly across many areas of the country, the luxury housing market in Alabama has done worse than most. Many luxury homes in Alabama have sit unsold despite having been listed for many months.

In Montgomery County alone, only fourteen luxury homes listed at five hundred thousand dollars or more have sold in the past year. That number is down from as many as seventy in 2005. Homes selling for over one million dollars have fared even worse.

The problem that is affecting the sale of luxury homes is the combination of a limited supply of buyers, and a lack of overall confidence among buyers. Many buyers fear that the value of homes will continue to drop, and they don’t feel that sellers are adjusting home prices enough to meet their true market value.

Even with mortgage rates at incredibly low levels, buyers do not seem interested in buying luxury homes. Supply continues to exceed demand in the luxury housing market, which makes it tough for sellers to find buyers unless they sell their home for significantly less than its market value.

Despite the limited demand and lackluster sales performance, many sellers of luxury homes have opted not to adjust their price due to the hope that someone will come along and buy their home at their desired price. Others, though, have decided to take alternative routes of selling their home. These luxury home owners are using the services of auctions to produce a quicker sale of their home, even if it results in a lower price.

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About Josh Johnson

Josh is the main writer for the Residential category. He also helps out on other categories when needed, mainly the International section.

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