Homes: What a million bucks buys
The luxury home market is holding up. See what $1 million buys in 7 areas around the county.
NEW YORK (CNNMoney.com) - As higher interest rates have slowed the boom in residential real estate prices the past few months, one segment has remained relatively strong: The luxury home market.
"There's enormous wealth in the high end, chasing the available homes," says Pamela Liebman, CEO of the Corcoran Group, which sells property mostly in the New York and Florida markets.
Jim Gillespie, CEO of Coldwell Banker, says that though he is seeing upticks in inventories and time-on-the-market, lluxury homes sales have even improved in some states. "In Idaho and Montana it's up tremendously," he says, "Minnesota too." (Photos of million-dollar homes from around the country.)
In 2005, Coldwell Banker reported that sales of million-dollar plus homes sold by the company totaled more than $55 billion, 24 percent higher than 2004.
Most luxury home buyers pay cash for their homes, according to Brenda Casserly, CEO of ERA Real Estate, which specially trains agents to handle luxury home sales. As a result, rising interest rates that cut affordability for most home buyers, have less impact on affluent buyers.
The resiliency of the million-dollar market is evident even outside its usual haunts of bucolic suburbs, gated communities and fashionable urban enclaves.
There are many neighborhoods in the old rust belt cities of the Northeast and Midwest, some of which have not enjoyed much of a price boom at all, where homes have now smashed through the million-dollar price barrier. Many are in neighborhoods that had endured decades of closed factories, declining populations, high crime rates and failing schools.
The areas, however, have retained a lot of their infrastructure, much of which will probably never be replicated in booming sunbelt cities. The cost of building with brick and stone, plaster and lath, is too prohibitive to be done on the same scale as was done 100 years ago. And the great virgin hardwood forests that furnished much of the gorgeous cabinetry, paneling and flooring of those times are gone as well.
Many of the homes built for the middle class of that time have features and details, such as oak or mahogany doors and crown moldings and stained glass windows, so costly to reproduce today that they are rarely found outside of the homes of the very wealthy.
And, although the average home built today is much larger than those built 40 years ago, many of the homes built in the earlier part of the 1900s were larger yet, tailored for the families of six seven and eight children or more.
During the past few years, urban flight has flagged and the virtues of city living are being rediscovered by a whole new generation. Core urban centers are now being lauded for their rich cultural offerings and lively street scene. And workers are attracted to these areas for their easy commutes.
The result: Many of these area's homes are back in demand and fetching high prices.
Look at some of their features and details these houses have retained and it's easy to understand why. (Photos of million-dollar homes from around the country.)