Over the past few years, home prices have dropped significantly from their peak (as much as 40% in some locations). As the economy continues to get better, opportunistic investors and families seeking a second home have begun taking advantage of these bargain prices and affordable current mortgage rates. According to Jan Rueter, head of residential real estate at US Trust Bank of America Private Wealth Management, “We’ve seen an up-tick in buying in just the last couple of months.” In Greenwich, CT, for example, realty brokers say that the final months of 2009 were close to record-setting in terms of sales volume, as borrowers took advantage of current mortgage rates in Connecticut.

Luxury Home

For investors and homeowners alike, it is important to emphasize that the economy is still in a state of recovery and that it is going to take some time for property values to increase. Nevertheless, it is also important to stress that the demand for homes in some of the country’s most prized locations is on the rise and that these low prices and low mortgage rates will not last forever. While the median price for a home in the Hamptons is currently $1.5 million, keep in mind that this represents a drop off of 30% from the peak sales prices of 2007.

Whether you want to realize your dream of being able to say “I’ve got a little place by the beach” as a second home or are looking to make an investment for the long term, now is the perfect time to tap into the slowly rebounding luxury home market and take advantage of low current mortgage rates and record-low prices in some of the most lavish localities in the United States.

The quarterly numbers for real estate sales in Manhattan were released this week, painting a dark picture of the current market.  While even the most uninterested layman could probably tell you that housing sales have fallen, the latest reports indicate that sales of Manhattan apartments and co-ops have fallen by as much as 58%.  This is a dramatic drop, especially when one takes a look at the deeply troubled auto industry, where sales are off by approximately 45%.

New construction and luxury apartments on Park Avenue, Fifth Avenue and Central Park West in particular have been hit hard by the housing slump.  Compared to a year ago, sales of apartments that are priced over $10 million have plummeted by a whopping 87%.  While there were eight co-ops that closed for over $20 million in the first quarter of 2008, only one managed to close for that amount in the same quarter of this year.