In the luxury real estate market this year, the headlines have been dour if not outright grim, with the message unmistakable: High end homes prices are clearly losing altitude all around the country.
Last month, the National Association of Realtors reported that homes priced above $1 million dipped four percent from the previous month. While far from being a correction, the downturn has been noticed by more than a few real estate market observers. In certain markets such as New York, Miami and San Francisco, frothy prices are beginning to give way to gravity.
That said, not all real estate professionals are in a panic about the current state of the market. There's a definitive chill in the segment of the ultra high-end market priced for homes above $10 million, yet there is still a "great deal of activity" in others, Philip White, president and CEO of Sotheby's International Realty Affiliates, told CNBC in a recent interview.
"Some markets are seeing a slowdown in the high end but some aren't," White said, whose company cranked out $80 billion in U.S. sales volume in 2015. "It is sort of a mixed bag and obviously there is some slowing," he said, even as he cautioned that ultra-high end sales were a much smaller slice of overall real estate turnover in the U.S.
White explained that several macro and behavioral trends were impacting the market, including a flood of foreign buyers and shifting tastes among key demographics, particularly younger buyers like millennials.
"Estates and farms in the country are a little out of favor because the migration is into the city," White said. In wealthy enclaves like Silicon Valley and New York City, low interest rates and rich buyers have sent median home prices skyrocketing.
Meanwhile, "on the other end, the larger houses that were of great appeal in the last decades" have seen a downward price adjustment, he added.
Location, location...and prestige
Although not all markets are seeing the same degree of retrenchment, a number of luxury properties have remained on the market for longer than usual before being snapped up at more favorable prices—a function of a "normalization" effect noted by Sotheby's International's White.
One example of this is 1 Main Street in Brooklyn, a triplex penthouse and housed in the clock tower of restored industrial building.
Despite its quirky pedigree and spectacular view of the New York Harbor and its environs, the penthouse described as "exquisite" by its broker actually stayed on the market for more than six years before being snapped up in June. During that time, the asking price tumbled from $25 million to $18 million.
The property is currently in contract, Nick Hovsepian, a broker at The Corcoran Group, confirmed to CNBC.
"The luxury market ($14 million and above) is seeing very clear indicators that location, spectacular renovations and building prestige" are determining factors that can sway buyers, Douglas Elliman luxury broker Katherine Gauthier explained via email to CNBC.
Gauthier said that level of discernment has been evident in her sales—including a nearly $16 million apartment at The Dakota on New York's Upper West Side, said to once have belonged to entertainment legend Judy Garland.
"Without these elements buyers are focusing elsewhere," Gauthier added. "It's a seller's market when you have the components…and it's a buyers' market if you don't."
Additionally, the market's cooling hasn't deterred a construction boom that's altered the skylines of places like New York City and San Francisco—partly a function of a massive influx of money flowing from overseas. A recent study by the Rosen Consulting Group and the Asia Society said that Chinese buyers have invested $300 billion in U.S. real estate.
In that vein, White says at least one out of every 10 online inquiry Sotheby's International Realty gets is from a prospective Chinese buyer. To take advantage, the firm recently struck a partnership with Juwai.com, one of the country's largest real estate portals.
"In your major cities…particularly when you have an international buyer, [real estate] is traditionally a safe haven and about preserving their capital," White said. "There's always been that part of higher end market."