Buying a Luxury Home in Today’s Market

If you have recently began searching for a home at the upper end of the market, no doubt you’ve noticed how tight financing is currently.  The days of 10% down on a million dollar home are far, far behind us.

According to BankRate.com, a bank interest rate surveyor, the average jumbo loan rate approached 7% in June.  In comparison, conventional borrowers can see rates sub-5%, quite the gap.

On top of the high interest rates, banks’ apprehensive lending appetite means you will need to bring 25% or more cash to the closing table.

However, it’s not all bad news for luxury home buyers.  If your net worth has bounced back a bit from last Fall and you’re back in the market, there are some amazing bargains to be had.  According to this article on Marketwatch.com, prices in metro areas such as Phoenix, Las Vegas, and San Francisco are all down as much as 30%.

No one truly knows it this is the bottom of the housing market but a 30% discount is pretty substancial nevertheless.  Even with markets off this much, homes are still setting unsold.  If you have some cash on hand and can afford to wait out a sale of your current home , now could be the time to start making some lowball offers and possibly finding a luxury home for 30% or more off 2008 prices.