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New York

Deep discounts: The luxury market has seen $1B in price cuts

High-end properties have gotten much less expensive

(Credit: iStock)
(Credit: iStock)

The market has seen steep price cuts amid the new tax law and fewer foreign buyers, CNBC reported. More than 500 listings had a combined price reduction of $1 billion in the second quarter, the report said.

“Prices were growing too fast for what buyers were willing to pay,” Taylor Marr, a senior economist at RedFin, told CNBC.

Of homes listed for $10 million or more, 12 percent saw a price drop. That’s doubled from 2015 and 2016.

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A 20,000 square-foot mansion in the Hamptons, once owned by fashion designer Vince Camuto, was listed for $100 million in 2008. That dropped to $72 million. And this spring it finally sold for around $50 million, the report said.

Some of the discounts are due to sellers adapting to the market after initially setting unrealistic expectations. It also stems from markets with too much high-end inventory. But it’s unclear whether the shift indicates a dramatic correction or a smoother adjustment.

“Price cuts can be a great leading indicator and give a forward-looking view,” Marr said. “But it’s too early to tell where it’s headed.” [CNBC] — Meenal Vamburkar