The whole Houston real estate market is going to take a hit “but the upper end is going to be impacted most,” Jankowski said.
Manhattan resale prices for the top 20 percent of the market peaked in February and have fallen every month since, according to an analysis through October by listings website StreetEasy.
San Francisco
Even in San Francisco, where the market for luxury properties remains strong, the inventory of listings for $2 million or more jumped in October to a record level, said Patrick Carlisle, chief market analyst for Paragon Real Estate. Both buyers and sellers were getting increasingly worried about the direction of the economy, he said.
“More sellers are jumping in and more buyers are holding off because they’re worried about where the volatility is going,” Carlisle said.
The economic turmoil, along with new regulations, slowed demand around the world. In London, the market weakened after the government increased a stamp-duty sales tax and Russians and Chinese buyers began pulling back. Luxury prices in London rose only 1 percent last year after jumping 5.1 percent in 2014, according to Knight Frank research.
Hong Kong prices rose 1.5 percent last year. They fell 5 percent in Paris and 3.5 percent in Singapore, according to Knight Frank.
Many families from Asia and the Middle East are still turning to the U.S. because it’s the safest place to park their money and to live if they need another home, said Tim Lappen, chairman of the luxury home and family office groups at the law firm Jeffer Mangels Butler & Mitchell LLP in Los Angeles.
The real test for the U.S. market will come after the Super Bowl on Feb. 7, when the prime home-buying season begins.
As the U.S. jobless rate hovers at 5 percent, the lowest in almost eight years, demand for lower-priced homes has increased, said Sam Khater, deputy chief economist at real estate data provider CoreLogic Inc. The cheapest U.S. ZIP codes had annual home-price growth in November that was more than twice the 4.3 percent rate for the most expensive ones, according to a Zillow analysis of ZIPs representing each metropolitan area it covers.
“The stock market is the consumer-confidence barometer of the upper-end real estate buyers,” Khater said.
Construction Crews
After a flat 2015, the Standard & Poor’s 500 index has tumbled 8 percent. Benchmark oil prices are now around $30 a barrel compared with more than $100 in 2014. The dollar has climbed 8 percent against 10 leading currencies in the past year, making U.S. real estate more expensive for foreign buyers, according to the Bloomberg Dollar Spot Index.
Buyers are now on the hunt for deals, said Nela Richardson, chief economist at Redfin.
“There’s a limit even to what a wealthy person will spend,” she said.