CNN reported Tuesday that luxury home sales soared in final months of 2012, which prompted me to do further analysis on our local market. CNN wrote:
Many sellers wanted to cash in on their homes before a widely expected capital gains hike — to 20% from 15% — that was part of the fiscal cliff budget deal. High-income earners (singles with income of $200,000 or more and couples making more than $250,000) also wanted to close sales ahead of a 3.8% Medicare surtax on investment income that was already slated to go into effect this year as part of the Affordable Care Act.
All told, a high-earner would pay $88,000 less in taxes if they made a $1 million profit on their home in 2012 rather than in 2013.
That considerable tax savings motivated many wealthy homeowners to move fast. According to the National Association of Realtors (NAR), sales of homes valued at $1 million or more spiked 51% in November compared with a year earlier.
Locally in Anne Arundel County, we also saw a year-end spike in high-end sales. The Institute for Luxury Home Marketing defines the luxury market as the top 10 percent of sales. For us, these are homes that sold above $600,000.
Sales of homes above $600,000 in Anne Arundel County increased 24% in 2012 over 2011, and the settlements in the fourth quarter were 47% above 2011.
Sales of homes above $1,000,000 also increased, yet not quite as much. Those sales in 2012 were 12% above 2011, and in the fourth quarter, 8% higher than 2011.
With the market strengthening, especially in the higher end, and interest rates remaining at historic lows, 2013 looks like a good year for those who want to make a move.
P.S. Considering a move? Please call for a confidential chat. Your personal needs, wants, and finances are my priority and my passion and my specialties run from waterfront luxury estates to distressed properties.
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