|Real estate auctions, once used for foreclosures and distressed sellers, is moving upmarket.
The number of multi-million-dollar homes being sold at auction has nearly doubled in the past year, according to real estate analysts and auction companies.
Concierge Auctions, the biggest player in high-end real estate auctions, said it will sell at least 20 homes this year that were listed for more than $10 million — double last year’s total. And next year is already looking even stronger.
“The trend for high-end real estate going to auction is definitely on the rise,” said Laura Brady, CEO of Concierge. “We’re seeing more sellers across the country more than ever before, especially in the $10 million, $20 million-plus and even $100 million-plus category.
The reason for the surge in high-end auctions is simple supply and demand. Developers and investors have built a vast supply of massive homes aimed at wealthy buyers with sky-high price tags. But the market for those homes remains relatively small, especially since Russian, Chinese and Middle East buyers have faded from the U.S. market.
What Happened to Rates Last Week?
|Mortgage backed securities (FNMA 4.50 MBS) gained +65 basis points (BPS) from last Friday’s close which caused fixed mortgage rates to move to their lowest levels not seen since October 2nd.
Overview: We had a holiday-shortened week (Veteran’s day), our domestic economic data was strong with a good beat in Retail Sales that would have “normally” pressured rates higher. But concern over the Brexit deal falling apart had money flowing into U.S. bonds as investors moved their cash into safety. The added demand for long bonds drove our mortgage rates lower for the week.
Retail Sales: The October data was much stronger than expected. The headline Retail Sales number came in at 0.8% vs est of 0.5% and Ex-Autos, they were 0.7% vs est of 0.5%.
The Talking Fed:
The number 2 person at the Fed, Vice Chair Richard Clarida said that rates are nearing the Fed estimates of a “neutral” rate and hinted that a predefined flight path towards a fixed number of rate hikes may not be what the Fed wants and that the Fed is moving back to a “data dependent” view towards the timing of any future Fed action.
Brexit: The process of Great Brittan separating from the European Union, has been long and arduous. It also is a major concern for investors as the type of exit (dubbed Brexit) will shape trade, banking, migration and more in Europe for decades. The British Prime Minister, Theresa May submitted a 585 page plan to her cabinet and then basically suffered a mutiny afterwards as it was an awful deal. Multiple key committee heads resigned their position and there were at least 22 letters written from parliament members of her party asking for a “no confidence” vote putting her time as their leader into question.
What to Watch Out For This Week:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.