Houses Valued Higher than $750,000 Gain Sales Momentum

Sales of homes priced above $750,000 are starting to pick up after being frozen at a very low level last year. For most of last year, first time homebuyers were driving sales and they were focused "almost exclusively" on foreclosed properties and other bargains priced under $250,000, according to Walter Moloney, economics spokesman for the National Association of Realtors. "Beginning in October for the first time we started seeing increases in other sales categories," Mr. Maloney said. Sales of homes priced from $750,000 to $1 million jumped 40% in January from a year ago, yet accounted for only 1.3% of total sales. Over 70% of sales in January involved properties priced under $250,000. Sales in all price classes rose in January. "The trade-up market is now beginning to benefit," Mr. Moloney said. Despite this movement in the top tier, foreclosure and short sales are expected to remain at a very high level. Last year, distressed sales comprised 36% of existing home sales. "Maybe it will come down to 33% this year," said NAR chief economist Lawrence Yun. In a normal market, distressed sales make up 15% of sales. "By historical standards, we have never seen anything like this before," Mr. Yun said.