It wasn’t too long ago when speculators dove into the real estate market to turn a quick profit by flipping homes. While those days are dwindling as the market cools, the luxury residential market is proving to be the silver lining in a stormy market.

Why is this market holding strong? High-end buyers, buoyed by abundant wealth, and basking in increased business profits realized in 2006, are fueling demand for luxury homes.

“Strong corporate profits….and a global commodities boom helped grow fortunes and sparked a surge of demand for trophy homes in 2006,” said Waco Moore, Vice President of The Institute for Luxury Home Marketing in a Mortgage News Daily article in January 2007.

“Record Wall Street bonuses will jump-start 2007 luxury sale in New York,” predicted Moore, “and, we’ll see spillover into other markets as well.”

Luxury homes are just one example of the luxury goods and services in demand, Moore continued, citing record art house sales and waiting lists for custom-built yachts and private planes. “Around the world, from Russia to Great Britain,” he said, “there is a super rich group with wants, needs and the wealth to satisfy those desires.”

Luxury home developers are also forecasting a profitable future in the luxury home market. In a Barron’s Online article, developer William Zeckenorf, who is building one of the most highly anticipated luxury buildings in New York City, stated, “From my vantage point, the super-luxury market is as strong as I’ve seen it.”

The reason for the market’s health, Zeckendorf, explained, is “There are very few great homes in this country, and an awful lot of people who have come into extraordinary wealth. In fact, there are now some 35,000 people in North America whose net worth, excluding their primary residences, exceed $30 million, according to a study by consultant Capgemini and Merrill Lynch.”

Zeckendorf’s optimism was echoed by John Karevoll in a January 2007 Naples News article. Karevoll is an analyst with DataQuick Information Systems Inc., which tracks the housing industry.

In a January 2007 New York Times article, Stribling Private Brokerage Director Kirk Henckels stated, “It’s not just the Wall Street bonuses—there is just so much liquidity in the market.” Henckels, who released a report on the luxury residential market, said the high-end market has been setting the pace for the rest of the market in the new year.

The Stribling report showed 2006 as a record-setting year in co-ops, in particular those above $5 million. Records filed with the New York City Department of Finance showed 38 January sales of co-ops, condos, and town houses for at least $5 million reported as of mid-February, with a combined value of $382 million. In January 2006, only 16 such sales, worth $124 million, were reported by mid-February.

In addition to steady purchases of luxury co-ops, condos and town houses, high-end buyers are also gravitating to unique, exclusive vacation homes located in markets where growth is limited.

In the span of a single day in January 2007, buyers consumed 25 condo units at the Club at Spanish Peaks in Montana, a location where no more than 49 units were planned near the 18^th hole of the Tom Weiskoff-designed golf course and quad lift, according to an April 2007 article in Worth magazine.