Despite a lull in the overall housing recovery, high-end homes are seeing a strong sales surge. Whether fueled by foreign buyers or cash-heavy, investment-hungry Americans, multimillion-dollar homes are seeing the biggest annual sales jump of any other housing segment.
Homes priced above $1 million represented just 2.5 percent of overall sales in July, according to the National Association of Realtors, but their volume jumped 8.5 percent from a year ago. Sales of the lowest-end homes fell by just as much. While the ultra-rich have always had a soft spot for real estate, their love affair is only heating up now.
"In the very high end, $35, $40, $50 million, it makes sense for them to buy because of carried interest [a rule in the U.S. tax code that lets managers of some types of investment funds pay a lower tax rate than most people]—or it's foreigners with all that cash—or it's the stock market's very high valuations," said Dolly Lenz, CEO and founder Dolly Lenz Real Estate, and CNBC contributor. "The $147 million purchase in the Hamptons, that was a carried interest purchase, a hedge fund guy."
Lenz recently represented News Corp. Chairman Rupert Murdoch in a reported $57 million purchase of four floors atop a Manhattan condominium tower.