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For the first time in history, there are more than a million households in the United States with a net worth of $5 million dollars or more (not including primary residences), according to an April report released by the Chicago-based Spectrum Group, “Affluent Market Insights 2007.” The number of Ultra High Net Worth individuals (those with a net worth of $5 million or more, excluding primary residences) grew 23% in 2006, representing the fastest growing sector of the luxury market. These numbers echo trends seen elsewhere indicating that while the rich are getting richer, it’s the ultra-affluent who are experiencing the greatest increase in wealth. According to the 2006 Forbes list of the Top 400 Richest Americans, each of the 400 individuals has a net worth of at least $1 billion dollars, a first since the company began compiling its list. There are also now more than 9 million Millionaire households in the U.S. (those with a net worth of $1 million dollars or more, excluding primary residences), an 8% increase from 2005 to 2006. And during the same timeframe, the number of Affluent households in the United States (defined as those with a net worth of $500,000 dollars or more, excluding primary residences) rose 9% to a record 15 million-plus. “We’ve seen these national trends reflected in the local housing market,” said Jeff Daley of Desert Ridge Phoenix Homes in Scottsdale, who is also a member of the Dallas-based Institute for Luxury Home Marketing. “There are currently 3,035 homes priced at a million dollars or more in the Scottsdale/Phoenix, Maricopa County area market.” Despite the general downturn seen in the housing market throughout much of the nation, the upper-tier continues to chart its own course, particularly where multi-million dollar homes are concerned. While those at the entry level of affluence are more likely to be affected by current market corrections, the upper echelon has traditionally demonstrated its capacity for greater resiliency in the face of economic fluctuations. Indeed, according to Forbes, two of the three most expensive properties in the world-a spec chateau in England neighboring Windsor Castle, and Donald Trump’s re-vamped Maison de L’Amitié in Palm Beach, Florida-have been vacant for two years. The owners have the resources to wait for the market conditions they desire. For some, luxurious estates are second homes, investments, or simply discretionary purchases. “At a time when the newswires are filled with stories of sub-prime lending crises and real estate gloom, we’ve simultaneously seen listings for $100 million-dollar homes hit the market, a history-making event in residential real estate,” said Laurie Moore-Moore, founder of the international Institute for Luxury Home Marketing, who has written and taught extensively on the luxury residential real estate market. Even in Florida, which has witnessed a notable downturn in upper-tier homes and estates, the caveats are quite particular to the market segment-greatly influenced by factors such as an international clientele, dollar valuations, and proposed tax changes. Luxury is not dead; it’s in a holding pattern, waiting for certain changes in market conditions before making a move. The convergence of a more complex market and an increasing number of affluent homeowners underscores why buyers and sellers of fine homes and estates value working with trusted real estate professionals who have the specialized skills, resources, and experience to help them achieve their lifestyle objectives. And what about those Ultra High Net Worth individuals? They might be just around the corner. According to Forbes, 89 of them are in the state of California making that the highest concentration of where billionaires are living today. For current information on the upper-tier market, please contact Jeff Daley at Desert Ridge Phoenix Homes – Scottsdale 480-595-6412 or by email.
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