Does Westchase have a Luxury Foreclosure Market?

What is a luxury home?  Do they go into foreclosure? And do we have any in the Westchase area?

The national media reports every day that housing is still declining and foreclosures will continue to increase.  We keep hearing about banks releasing waves of foreclosures.  So there’s bound to be lots of luxury foreclosures in Tampa and in the Westchase area, right? 

Shockingly, there are only three, two and zero foreclosures in Hillsborough, Pinellas and Pasco County, respectively, with a price point of more than one $1 Million.

In a housing market that has been declining for at least five years and and because home prices were so artificially inflated maybe we should be looking at homes over $500,000.

But this theory doesn’t hold water either with only 11, 7 and 0 foreclosures in Hillsborough, Pinellas and Pasco County, respectively, with a price point of more than $500,000.

Traditionally within real estate circles in Tampa Bay, a luxury home is a home that has a list price of more than $1 Million.  Each real estate brokerage defines a luxury property differently and some do have different price point minimums.

For instance, the Coldwell Banker Previews program defines the luxury market as homes with a list price of more than $1 Million and Century 21 Fine Homes & Estates defines it as more than $500,000.  In addition, that luxury home must also be ‘of exceptional quality and style and reflecting a prestigious image.’

So while a price point minimum is required to keep the exclusivity and meet the expectations of the luxury clientele, beauty is also sometimes in the eye of the beholder.  This is when a home with a price point of $500,000 may have exquisite finishes and upgrades which may sweep it into a luxury category.  Ironically, a vacant lot on a truly exceptional piece of water with a luxury price point can also be a luxury listing. 

Westchase luxury foreclosures don’t exist as of the date of this column.  There wasn’t a foreclosure in zip code 33626 with a price point of more than $1 Million.  The Tampa Bay Business Journal reported in its April 8, 2011 edition that '33626' is one of the 25  wealthiest zip codes in Tampa Bay but we have no luxury foreclosures.

Drop the minimum to $500,000 and there’s one foreclosure for $739,000 in Mar Azul, the gated enclave within Waterchase. Strangely, it has been on the market for 34 days, which is a long time for a foreclosure to sit on the market.

This basically tells us the luxury market hasn't really been hit in the Westchase area.

"Eighty-one percent of the single family homes sales in the last six months were under $250,000,” said Charles Richardson, regional senior vice president of Coldwell Banker Tampa Bay. So luxury listings are not a large part of sales either. 

In fact, sales of homes with a sales price in excess of $500,000 in Westchase in the first four months of 2011 are down 40 percent versus the same period last year.  And there were no sales in excess of $1 Million whereas there were 2 sales in excess of $1 Million in the first four months of 2010. 

So the luxury foreclosure market is quiet.  For sellers, perhaps the deeper pockets allow the luxury seller to weather this housing storm.  For luxury buyers, they don't have a lot to choose from if they are thinking of purchasing a luxury foreclosure in Tampa Bay. 

All in all, the luxury clientele won’t find very many high-end foreclosure deals in Tampa Bay.