Confidence drives sales of $1M homes across Western Pennsylvania, nation
Sales of million-dollar homes are reaching new heights across the nation, and Western Pennsylvania is no different.
In the seven-county region, 88 homes priced $1 million or more sold in 2012, the highest number in recent history, and the trend continues. Twenty-six such listings sold through June 16, according to RealStats, a South Side-based real estate information company.
Nationally, more than 8,300 homes costing $1 million or more sold in the first quarter of this year, a 36 percent increase from 6,100 homes sold in the same period in 2012, according to Redfin Real Estate Blog, an online real estate broker in Seattle that looked at 22 markets, though not Pittsburgh.
Low interest rates for mortgages, favorable home prices and an economy that is more secure than those in other countries are driving sales of luxury houses, experts say.
Buyers of expensive homes cite a variety of reasons for their purchases.
Dina and Doug Kaleugher like to entertain. Their daughters, Leah, 12, and Miah, 10, often have friends over. Another daughter and a son have moved out of the house.
With that in mind, the Kaleughers decided to buy a house that would afford them those opportunities to entertain. They turned to Kevin Mihm of Coldwell Banker to help them when they found a house under construction by J.J. Herbert Builders in Marshall.
“There are so many things our new house, which cost over $1 million, has that our former home in Seven Fields didn't that we are delighted with it,” Dina said.
The house has plenty of room to entertain friends and family, including two guest rooms decorated in Steelers' black-and-gold, and amenities for their girls to share with friends: an in-ground swimming pool, a pool table, a theater room and a large lawn.
Jeff Martin, owner of Primrose Homes Inc. in Butler, is among the region's builders of $1 million-homes. Some he builds on speculation, or on “spec,” without valid contracts. He attracts buyers through such features as theaters, wine cellars, kitchenettes, whole-house audio systems and automation that enables a homeowner to control the home's mechanical systems through a smartphone.
Buyers also want specialized cabinetry for kitchens and closets, Martin said. Outside, features might include pools, covered patio areas and built-in grills or fire pits.
“My buyers usually are bankers, attorneys, executives of major corporations and business owners,” Martin said. Some are newcomers to the Pittsburgh region, and he depends on real estate agents to help locate buyers, he said.
Someone buying a luxury home in today's economy has renewed confidence of selling an existing home for a fair price, something that was missing in the market a few years ago, experts said.
“Buyers also are able to obtain below mortgage interest rates by pledging, but not surrendering, their stocks and bonds and other equities towards the loan,” Martin said.
Though million-dollar houses are not commonplace in this region, since 2009, total sales of such homes increased annually — 73 in 2010 and 78 in 2011.
Ron Croushore, president/owner of Prudential Preferred Realty, chalks it up to consumer confidence.
“I expect high-end sales to be relatively strong into the future, with minimal decreases even if economic activity slows at times,” he said.
Croushore said high-end sales occur in a wide geographical area, with “slightly heavier concentrations during the past three years in Fox Chapel, Sewickley, Marshall Township and Shadyside.”
Martin is confident that two spec homes he's building in Pine — one priced at $1.85 million and the other at $2.1 million — will sell when finished.
Last year, the highest price paid for a house in the region was $5.6 million for a two-story house on 125 acres in Upper St. Clair. Two other sales were slightly higher, but the purchases, which included homes, were by corporations and involved large acreage.
Still on the market in Rostraver, Westmoreland County, is a house listed with Keller Williams Realty for $8.85 million. Called “The Castle,” the 18-year-old residence built by William McCloskey sits on a 33-acre site with a baseball field, three-hole golf course, fishing dock and four-car garage. The five-bedroom house has a basketball practice room inside, sunken game room, a gym, butler's pantry, heated floors and four fireplaces.
Sam Spatter is a Trib Total Media staff writer. YHe can be reached at 412-320-7843 or firstname.lastname@example.org.