On February 21, 2011, a headline in USA Today read: “For the Wealthy, Luxury is Back”
The dusty money is not interested in real estate speculation, and this trend is emerging across the country. All around America, people who are more dependent on portfolio returns than the ups and downs of the economy are buying big-ticket real estate as if a market reversal were in the works. It’s possible, of course, that these buyers are just seeing great values and taking advantage of them. But my instinct tells me that these buyers have seen this cycle before, and they’re protecting their money by investing it in assets that will appreciate.
It’s still nothing close to a bidding war out there, and the number of high-end real estate properties available is finite. But if you were to look at the big sales in River Oaks from 2010, you’d never know that real estate was in a slump. The difference in these sales is that the houses were priced not at bubble prices but at sensible market prices. This brought out the dusty money, a group that tends not to participate in market frenzies. Feeling comfortable in the current, realistic market—where marketing is done on the Internet and prices are solidly grounded in the interests of the consumer—the dusty money has emerged, tentatively heralding the beginnings of a real estate turnaround.