California’s Million-Dollar Home Sales Gain Traction

Despite a decline in California home sales last year, the number of homes sold in the Golden State for $1 million or more in 2010 rose for the first time since 2005, according to a study from San Diego-based DataQuick Information Systems.

The research firm notes that California experienced a 9 percent year-over-year drop in total home sales in 2010, including all price levels.

Million-dollar sales peaked in 2005 at 54,773 and then declined each year through 2009. In 2010, 22,529 homes sold for $1 million or more in California, a 21 percent increase from 18,621 in 2009.

DataQuick says about one in 20 homes sold for a million dollars in 2010. It was one in 25 in 2009 and one in 16 in 2008.

“Prestige home buyers respond to a different set of motivations than the rest of us,” said John Walsh, DataQuick president. “Their decisions are less dependent on jobs, prices, and interest rates and more on how their

portfolio is doing. When the financial world was full of uncertainty a couple of years back and the jumbo loan market dried up, luxury sales plummeted.”

Walsh continued, “As the economy started its top down recovery, some wealthy buyers went looking for a bargain. Additionally, there has always been a safe-haven component in the million-dollar market that attracts wealth.”

The vast majority of California’s million-dollar-plus home sales last year were in San Marino in Los Angeles County, Los Altos in Santa Clara County, Atherton and Hillsborough in San Mateo County, and Rancho Santa Fe in San Diego County.

According to DataQuick’s report, statewide 463 homes sold for more than $5 million last year, 304 were in the $4 million to $5 million range, 782 were in the $3 million to $4 million range, 2,333 were in the $2 million to $3 million range, and the rest-nearly 79 percent-sold for between $1 million and $2 million.

Based on public records, the most expensive confirmed purchase in 2010 sold for $50 million. The Bel Air residence was the state’s largest million-dollar home sold last year at 35,378 square feet with 15 bedrooms and 7 bathrooms on about 2.2 acres.

Newly built homes accounted for 5.9 percent of last year’s $1 million-plus sales, down from 6.5 percent in 2009. Condo sales made up 8 percent of the million-dollar category last year, down from 8.3 percent the year before.

DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies, and industry analysts.

2010 Mid Year LA Luxury Market Report Sales Volume is Up

July 31, 2010

The luxury Westside—Triangle communities (over $2 Million) of Beverly Hills, Beverly Hills-Post Office, Bel Air and Hancock Park continued to show positive sales growth for the Mid-Year Report from January 1, 2010 to June 30, 2010.

BEL AIR Sales Volume Up 163%! Transactions Up 64% BEVERLY HILLS Sales Volume Up 45%! Transactions Up 26% HANCOCK PARK Sales Volume Up 37%! Transactions Up 130% BHPO Sales Volume Up 12%! Transactions Up 33%

The luxury Westside—Triangle communities (over $2 Million) of Beverly Hills, Beverly Hills-Post Office, Bel Air and Hancock Park continued to show positive sales growth for the Mid-Year Report from January 1, 2010 to June 30, 2010. Bel Air sales volume was up a whopping 163% and Beverly Hills City was up 45% when compared with the same time period a year ago. While Hancock Park (up 37%) and BHPO (up 12%) sales volume was also higher, the number of sales transactions was up 130% in Hancock Park and 33% for BHPO.

A significant factor for the increase in sales activity is that sellers have become much more realistic about value. It’s important to note that the average sold price was usually within 5%-7% of the final list price. This means it is even more important than ever to market your property at the correct price point. If it’s overpriced, even by 10%, it will most likely just sit there and may even increase the chances of it selling below market value. I have included a repeat of my Perfect Pricing article in this market report. The increased demand, in turn, has demonstrated greater perceived value resulting in stronger buyer confidence.
Foreign buyers continue to make a strong impact in our luxury market. While not officially public information yet, the Wall Street Journal has reported that the recent Bel Air sale in the $50 Million range, which would be the highest residential sale in the US this year, was purchased by an Indonesian buyer. A recent survey by the National Association of Realtors reports that foreigners made up for 7% of residential transactions and they were much more likely to be an All Cash purchase. Of course this is a national survey, it’s important to note that international buyers tend to select top destinations such as California, Florida, Texas & New York, so our numbers may be considerably higher.
While the summer market sometimes slows down since many of us are traveling, we anticipate a continuation of the same trends for the upcoming third quarter. Interest rates have remained historically low and availability of financing seems to be opening up. The upper-end properties should continue their strong demand. While there is no ‘business as usual’, at least there are signs that we are returning to a market that we can understand.

Letter from the Editor: The Art of Wintering

Lucas Fox, which offers luxury properties on Spain’s Costa Brava, helps satisfy buyers’ tastes for European seaside havens.
Lucas Fox, which offers luxury properties on Spain’s Costa Brava, helps satisfy buyers’ tastes for European seaside havens.

When Salvador Dalí arrived on Spain’s stunning Costa Brava in 1930, he found its beauty so bewitching that he settled into a small fishing hut in Port Lligat bay in the town of Cadaqués. As his life progressed, so did the house, one room at a time. “Each new pulse in our life has its own new cell, a room,” he said of the continually changing, labyrinthine residence he would create from the tiny hut. Some rooms had white walls and distressed wood plank floors reached by narrow hidden passageways, others had furnishings bordering on—what else—the surreal. Dalí spent some 50 years in the house, now a museum and an enduring reminder of the magic that results from finding a place one would rather never leave.Costa Brava has retained its summery charm through many winters since Dalí settled there—its hills are now peppered with traditional, rustic stone farmhouses; its coastline is at once a sleepy fishing village and host to the occasional ultra-modern whitewashed compound. With a stabilizing housing market, the area offers smitten visitors even more reason to stay on, and this month’s Location column leaves no stone unturned in an effort to provide all the tips and tools it takes to help turn your Costa Brava dream hut into a reality.

If California’s mild winters sound tempting right about now, we take you to several very different residences in the Golden State, from a designer’s 1950s winter escape in Palm Springs to actor Roger Davis’ modernist enclave in the Hollywood Hills and a contemporary loft designed for an M.D. in super-hot Venice. We also visit L.A.’s charming Hancock Park, where designer Timothy Corrigan took a Tudor estate—which was down to studs—and painstakingly revived it to beyond its former glory, and present a $12 million Rancho Mirage compound with dreamy undertones.

Should winter turn you into more of a snow bunny than a snowbird, die-hard skiers and boarders will want to take notice of ownership opportunities at the Ritz-Carlton’s ski-in/ski-out residences at Colorado’s Bachelor Gulch, with its unforgettable “champagne powder,” as well as their residences at the Highlands in Lake Tahoe, with owner privileges such as a ski concierge and a direct gondola to the mountain. To top it off, this month’s Smart & Wired section covers Ultra-Mobile PCs—more powerful than a PDA and more compact than a laptop—perfect for checking e-mail over a hot toddy at the lodge.

Whether the new year gets you thinking sun or snow, secluded cove beaches or private black-diamond runs, we hope this issue compels you to winter in style.

Home of the Week: Chateau on Lake Arrowhead

Completed a few years ago, a Normandy-style estate was built to look a century old.

Waterfront retreatThis 11,000-square-foot Lake Arrowhead estate, completed in 2007, was designed to look as though it had been standing for a century. (Everett Fenton Gidley)

// <![CDATA[//

Glen and Linda Keane felt guilty about tearing down the O’Melveny family home. After all, John O’Melveny was part of a group of Los Angeles businessmen who formed Lake Arrowhead Co. in the 1920s and oversaw the lake’s development into a popular resort destination.

But the Keanes couldn’t work with the 1931 home anymore. “Previous owners had added wings that actually blocked the lake views,” Linda Keane said. “It no longer had the charm it once had.”

The Keanes, who had lived in France for several years and were smitten by its architecture, were in Paris when they contacted architect Richardson Robertson III in Los Angeles to set up an appointment. The person who answered the phone told them that Robertson was out of the country — in Paris of all places.

They gravitated to Robertson’s Nouveaux Beaux-Arts style, and a deal was inked to create a French Normandy design appearing as though it was already a century old. Construction began in 2002 and took more than five years to complete.

Arrowhead Pointe, which is set back on a peninsula between Shelter Cove and Winter Harbor Cove, features a classic center turret, a steeply pitched roof (with imported tri-colored patina clay tiles) and randomly spaced rafter tails. The granite stone that wraps around the home was harvested from the local mountains, the lake’s shoreline and Christmas Tree Island — a small island a few yards offshore that’s visible only when the water level is lower than normal. Stone chimneys flank the turret and a drive-through archway connects the main house to the guesthouse.

French sculptor Emmanuel Fillion carved a pair of limestone bear corbels on either side of the quartersawed white oak front door. Fillion’s sculptures also can be found on several interior fireplace mantels.

Inside, Massangis French limestone covers the entry and foyer floor.

Interior walls are textured in several coats of plaster — made to appear as if it is covering stone — one of many subtleties that give the home an older appearance. Windows are of single-pane restoration glass.

The vaulted, open-beam Douglas fir ceiling in the living room rises more than 30 feet at its peak. It’s shaped like the interior of a ship’s hull. Two circular black iron custom chandeliers hang in the center. Three sets of French doors on the north and south wall allow sunlight to stream into the large, rectangular room.

Aligned archways provide a direct sight line from the library through the living room and foyer and into the symmetrical dining room that’s designed to look like a wood-paneled brasserie. The terra cotta marble fireplace was imported from France. Ceiling beams are bleached and glazed to achieve a honey-colored look. The same effect was used on the wood beams in the master suite, breakfast room and kitchen. The floors in the breakfast room and kitchen are covered with handmade Parefeuille tiles arranged in different patterns.

Antique painted alder wood cabinets line the kitchen walls, and a double-oven Wolf gas range is enclosed in stone.

From the butler’s pantry, stairs lead down to the game room, a wine cellar and a 15-seat home theater with additional bar seating.

A skinny circular iron stairway leads up to a balcony that frames the white-oak-paneled library on three sides and has an alcove sitting area.

The connecting work studio is more rustic than the other living spaces. It features two chandeliers made of deer and moose antlers. The stone cut for the fireplace is the same as that used on the exterior. A log was carved into a mantle.

Agent Reboot!!

Los Angeles

Program » Speakers » Location »

Los Angeles

Los Angeles | August 5, 2010 | Register Now »

Agent Reboot is a power-packed, low cost, local event for real estate professionals. This one-day, fast-paced program, will equip agents with the latest in business development, technology and marketing skills to help them be more successful. Agent Reboot is being offered in 12 cities across the United States.

Agent Reboot is the perfect hands-on training day for a newer agent or a seasoned pro. Local real estate agents and REALTORS® are expected to attend each event.

Highlights of each event include a networking power-hour and expo featuring cutting-edge real estate technology vendors.




Plug in to the future of real estate in one power-packed day!

8:00 am to 9:00 am — Attendee Check-in

Pick up your Agent Reboot badge and enjoy coffee and a continental breakfast while visiting with our sponsors and exhibitors.

9:00am to 9:15am — Welcome Address

Technology is changing the way buyers and sellers connect, and that means new opportunities and challenges for real estate professionals. Join Nicole as she kicks off the program with a fun and interactive look at how innovation is changing the future of real estate.
•  Moderated and Presented by: Nicole Nicolay, Founder & CCO, Agent Evolution, @nik_nik

9:15am to 9:30am — Download: Must-Have Tools for the Agent with Mobile Mojo (Part 1)

Get the lowdown on 10 leading edge technologies that will help you “reboot” the way you do business.

9:30am to 10:00am — From Clicks to Closings: Turning Your Online Marketing Strategy into a Lead Machine

Video, virtual tours, single property websites – there are dozens of options for marketing properties online. Not all methods are created equal though. Find out which ones will keep your pipeline of prospects full, while saving you time and money.


Jason Lopez, Director of Interactive Marketing, Century21 Award @jaylopez
•Derek Overbey, Senior Director of Marketing and Social Media, Roost, Inc. @doverbey

10:00am to 10:30am — Mastering Social Media to Expand Your Reach Online

Learn how to develop a comprehensive social networking strategy to grow your sphere of influence. Agent Reboot’s experts will help you sharpen your online marketing skills with proven best practices for using Facebook, Twitter and other online services. Win friends, influence people, and increase sales!


•Derek Overbey, Senior Director of Marketing and Social Media, Roost, Inc. @doverbey

10:30 to 10:45 — Break

10:45am to 11:00am — Life Style Branding: Why it Matters

The traditional branding strategies used by the real estate profession no longer work. Connecting with today’s consumer is a whole new adventure. The last 8 years has changed the expectations of home buyers and sellers. Learn why life style branding is critical to your success moving forward.

•  Sherry Chris, CEO, Better Homes & Gardens Real Estate @BHGRE_Sherry

11:00am to 11:30pm — Case Study: Managing Reputation and Content on the Web

Two experts will walk you through their journey towards a progressive Web strategy using social media. They’ll share lessons learned, offer tips, and show you the results of their efforts. Learn how to do it from people who have done it.

Presented by:

Stacey Harmon, Founder, @staceyharmon
• Lindsey Planeta, Realtor and Broker Owner for Orange County at M Realty Orange County @lindsey

11:30am – 11:40am – Download

11:40am – 12:00pm – Half Time Report

Gut-Check.  We hope the first half has left you brimming with ideas!  You’re ready to stop doing the old stuff, but what are you supposed to be doing now? Join Nicole as she checks in with the audience to wrap up the morning and sets the stage for the afternoon.

12:00pm to 1:00pm – Lunch Break

In real estate, making connections is vital to an agent’s success, so take advantage of this hour-long break to grab lunch with new found contacts. It’s a great opportunity to mix and mingle with some of the best agents and vendors in the business before the afternoon program begins.

1:00pm to 1:30pm — Maximum Exposure: Publicizing Your Listings

Make sure your listings appear everywhere potential buyers are looking. Discover easy methods for syndicating listings across the Web to spread the word about your properties, and get simple tips for tracking results.


David Vivero, CEO, RentJuice
• Amanda Wernick, Realtor/Director of Social Media, Seven Gables Real Estate

1:30pm to 2:00pm — Download: Must-Have Tools for the Agent with Mobile Mojo (Part 2)

Get the lowdown on 20 MORE leading edge technologies that will help you “reboot” the way you do business.

2:00pm to 2:45pm — Going Local: What Does It Take to Win in Los Angeles Real Estate?

It’s no secret that the industry has had its share of ups and downs in the last year. So, what lies ahead? Hear from leading real estate professionals who are navigating the changing landscape, and find out what steps you should be taking to ensure success in the future.


Gary Gold, Executive Vice President, Hilton & Hyland / Christine’s Great Estates
Mike Hickman, CEO, Seven Gables Real Estate
Rick Sharga, Senior Vice President, RealtyTrac

2:45pm to 3:00pm — Wrap-up and Agent Reboot’s Giveaways


Sherry ChrisSherry Chris
CEO, Better Homes
& Gardens Real Estate
Gary GoldGary Gold
EVP, Hilton & Hyland/
Christine’s Great Estates
Stacey Harmon
Stacy Harmon
Principal, Harmon Enterprises
Michael HickmanMike Hickman
CEO, Seven Gables
Real Estate

Jason LopezJason Lopez
Director of Interactive Marketing, Century 21
Nicole Nicolay Nicole Nicolay
Founder & CCO
Agent Evolution
Rick ShargaRick Sharga


Ackerman Union
Grand Ballroom
308 Westwood Plaza
Los Angeles, CA  90024

Price cuts galore on mega-mansions! mega mansion in Apline, N.J., is selling for the bargain price of $68 million. For photos of more high-dollar listings, click here. By Les Christie, staff writerJuly 16, 2010: 6:23 AM ET

NEW YORK ( — For deep-pocketed plutocrats purchasing trophy homes, times are good. There is a glut of mega-mansions on the market — at deep discounts.

On alone there are currently 6,610 listings of houses with interiors larger than 10,000 square feet

“Buyers are not used to having this amount of inventory,” said Russ Filice, an agent with Sotheby’s International Realty, which represents many ultra-high-end properties. “The options are greater than ever.”

What’s surprising is that these homes are starting to move again. “Maybe not quickly, but they’re selling,” Filice said.

The super-wealthy fled the mega-mansion market in the wake of the Lehman Brothers collapse in the fall of 2008. But with the stock market recovering and real estate markets stabilizing, they’re ready to deal again. But only if the price is right.

“The super wealthy were watching and waiting,” said Jonathan Miller, a New York-based appraiser, who follows real estate in Manhattan and the Hamptons. “It’s always been my feeling that the high-end market comes in waves. I looked at the Hamptons in 2009 and you just weren’t seeing trophy property sales. Now you are — but not at the prices you saw during the boom.”

A 48,000-square-foot home in Bel Air, Calif., was recently reduced by $13 million to $72 million. A 16,000-square-foot nouveau Mediterranean in Las Vegas went to $11.9 million from $14 million. And a 15,000-square-foot Dallas domain is down to $15 million from $17.5 million after more than two years on the market.

Don’t like those prices? There are plenty more to choose from. So many homes started during the boom, when owners were flush, were not completed until the bust, when owners’ fortunes had changed. And they’re ready to unload them.

“A number of people back in the 2003, 2004 and 2005 boom built very large homes,” said Philip White, president of Sotheby’s International Realty. “Then, with the adjustment in the economy, it proved to be too much house for some of them.”

// <![CDATA[//

In Alpine, N.J., developer Richard Kurtz broke ground in October 2007 on a home for himself. He calls it Stone Mansion, a 30,000-square-foot spread with 12 bedrooms, 15 full baths, a screening room, wine grotto and indoor basketball court. The house was finished just a couple of months ago.

Between then and now, Kurtz decided to buy a house in Florida and sell the Stone Mansion. Asking price: $68 million.

A house near Orlando has been under construction for more than three years and is not done yet. Business has been slow for owner David Siegel, who also owns Westgate Resorts, so he is putting his house on the market.

The 67,000-square-foot house sits on 10 acres and is called Versailles because it incorporates many of the design features of the French palace. Siegel hopes to get $100 million if the buyer wants the 67,000-square-foot property finished.

Or he’ll take $75 million as is

Time to Storm the Castle?

provided by

At the High End, a Bit More Money Yields Lots More Home; 14 Acres and an Orchard

Daniel Horowitz is ready to bargain.

The 55-year-old trial lawyer is trying to sell a four-bedroom villa with marble imported from Italy, a winery and a fruit orchard on 14 acres in Lafayette, Calif. Mr. Horowitz already chopped the price to $3.2 million from $4 million, the amount he estimates having spent on the land and construction. “We thought it would sell right away,” he says. But it hasn’t, and he is willing to consider lower offers, he says.

Three years into the housing bust, steep discounts are emerging in the market for high-end homes, which had been the real-estate industry’s last redoubt until now. Despite the budding economic recovery, demand for pricey properties is falling as potential buyers struggle to come up with money for big down payments and find it difficult to qualify for large mortgages. With buyers dropping out and homes languishing on the market, sellers are beginning to capitulate, cutting prices to move their properties.

The result: Buyers with lots of cash, or access to it, can find great deals. Not all million-dollar homes are castles, especially in coastal markets. But price drops and relatively small bumps in budget are landing shoppers the kind of amenities—kingly bathrooms, stables, gates—that were once beyond reach. Kenneth Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley, says it is a “very good time to be a buyer at the high end.

In some markets, houses that are more than twice the size of others are on the market for less than twice the cost. Shaun Rawls, a broker at Keller Williams Realty in Atlanta, points to two homes with similarly desirable locations in that city’s wealthy Buckhead district. The smaller home, with 3,060 square feet, is priced at $765,000, or $250 a square foot. The larger home, with 7,612 square feet, has an asking price of $1.2 million, or $158 per square foot.

Though larger homes often have lower square-footage costs than smaller homes, the gap today is often greater. In Mill Valley, Calif., a 1,127-square-foot three-bedroom listed at $898,000 just went under contract. Its per-square-foot cost: $797. A four-bedroom home five minutes away—and nearly three times the size at 3,077 square feet—is being listed at $1.5 million. Its square-foot cost: $486.

Similarly, in Scottsdale, Ariz., one four-bedroom home lists for $1.2 million while another lists for $1.48 million. That additional $280,000 buys a 5,400 square-foot home, 46% bigger than the cheaper house.

Room to Drop

The million-plus market seems ripe for falling prices. Until now it has been lower-end homes, which saw the sharpest run-up during the boom, that have borne the brunt of the housing bust. Though there aren’t national statistics that track the million-dollar market, local markets show that prices for top properties have room to drop. For example, the bottom third of the Los Angeles area market—currently homes under $300,000—has seen prices fall by 52.5% since the market peak in 2006, returning to April 2003 levels, according to the S&P/Case-Shiller indexes. Prices for the top third of the market—currently homes above $510,000—have fallen by 27.3% from the peak, to March 2004 levels. While prices at the bottom of the market gained 5% over the last quarter of 2009 from the previous quarter, high-end home prices dropped 0.5%.

Keller Williams Realty
This approximately 10,686-square-foot-home at 580 Madeline Drive in Pasadena, Calif. is listed for $2.5 million. It has 10 bedrooms and nine bathrooms, a billiards room and a guest suite.

Home sales across the board remain sluggish. Sales of existing homes fell 0.6% last month to a seasonally adjusted rate of 5.02 million units, while new-home sales fell by 2.2% last month to lows last seen in 1963. But the mismatch of supply and demand is now widest in the seven-figure market. In the most coveted Northern Virginia suburbs of Washington, for example, supplies are fairly tight up to about $900,000. But it is a buyer’s market between that level and $2 million, says James W. Nellis II of Re/Max Allegiance, a local broker.

That makes for some deep discounts. In Mill Valley, Calif., the price on one four-bedroom home was reduced March 11 to $2 million from $3 million. The house has 2,500 square feet of decks overlooking San Francisco Bay, says the listing agent, Suzy Doyle. On Ranch Gate Road in Chula Vista, Calif., a foreclosed home with six bedrooms is being offered at $675,000. In 2006, when it was new, the home sold for $1.3 million.

Few people consider million-dollar homes cheap, of course. Stretching to buy a big home comes with obvious risks. Prices may be falling, but no one knows where the bottom is. Marc Carpenter, a real-estate agent in San Diego, cautions buyers in that battered market that, “If you buy now, [you should] plan on prices reducing over time.”

Another potential pitfall is that higher-end houses are much harder to value than lower priced cookie-cutter dwellings. Often, high-end homes are unique, and the prices they fetch may have to do with such intangibles as an ocean view or an address with more snob appeal than those just blocks away. That makes it much harder for buyers to find comparable sales indicative of true market value.

Bargain hunters also need to be realistic. They aren’t likely to get a steal on the best-preserved homes in the nation’s top neighborhoods—places like Central Park West in Manhattan, Santa Barbara, Calif., or the exclusive parts of Boulder, Colo. Supply is permanently constrained in such areas because there is little room to build. And lots of people with money are eager to move in, so prices are likely to come down only slightly.

The best deals will be on high-end homes that might need work or aren’t in the most highly sought-after locations. That leaves plenty of coveted neighborhoods with good schools and amenities to choose from.

Harry Norman Realtors
Built in the 1980s, this 2,955-square-foot home at 2609 Peachtree Battle Place NW in Atlanta has four bedrooms and four bathrooms. It is on the market for $765,000.

Despite the risks, the mortgage market might be suggesting that shoppers buy sooner rather than later. Many forecasters predict that interest rates will rise from today’s unusually low levels, in part because the Federal Reserve this month is ending its heavy purchases of mortgage securities. Even if waiting another year might bring lower prices, at least some of that advantage could be wiped out by an interest-rate spike.

Interest rates play a huge role in affordability—and even more so in high-end markets. A $1.2 million home today might require a 25% down payment, says Lou Barnes, a mortgage banker in Boulder. At today’s rate of about 5.75% for a 30-year “jumbo” mortgage, that would mean a monthly payment of $5,252. But if rates were to rise to 6.5%, the monthly payment would rise to $5,688. The home’s price would have to fall $1.1 million to keep the monthly payment at a comparable $5,215.

On the demand side, the technicalities of the mortgage market are thinning the ranks of million-dollar home buyers more than usual. Most buyers need a mortgage and would much prefer a cheaper, mainstream one backed by Fannie Mae (NASDAQ:FNMNews), Freddie Mac (NASDAQ:FRENews) or the Federal Housing Administration. But loans that meet the government’s criteria can be no larger than $417,000 in most of the U.S.; in higher-cost areas like New York and San Francisco, that limit stretches to $729,750.

Loans above those limits are considered jumbos. While rates on jumbos are way down from a high of about 7.9% in October 2008, they remain well above the 5.1% found on conventional loans guaranteed by Fannie or Freddie, according to HSH Associates. What’s more, lenders also require heftier down payments for jumbo loans—in some cases 25% or more of the home’s value.

The shrinking pool of potential buyers is giving people of means unusual bargaining power. The inventory of all listed homes in February was enough to last 8.6 months at the current sales rate, according to the National Association of Realtors, a trade group. For those priced above $1 million, the supply was enough to last nearly 32 months.

‘Perfect Time to Buy’

For these reasons, “this is the perfect time to buy,” says Eric Awad, a neurologist in Atlanta who thinks market conditions are forcing sellers of high-end homes to knuckle under. He and his wife, Nachwa Jarkas, an assistant professor at Emory University, are eager to trade up from their town home and buy a four-bedroom house in Atlanta’s posh Buckhead district. They are looking in the range of $1 million to $1.2 million, though Dr. Awad hopes to “knock the price down” below $1 million.

Like many potential buyers of high-end homes, the couple has a big hurdle to clear: Before buying, they need to sell their town home, which is on the market for $575,000, and they have no idea how long it will take for them to find a buyer. In this still-troubled real-estate market, success favors buyers who don’t have to sell first.