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After four years of decline, one-million dollar+ homes sales rose 18.6% in 2010. In the same time period, home sales below one-million fell 2.8% nationwide. Amazingly, homes sales over five million increased significantly. The main reason is due to the historically low interest rates on loan amounts as high as $686,000 (SLO), which were previously considered the higher rate, non-conforming, “Jumbo Loans” over $417,000. In 2009 buyers of high-end homes paid 1.8% points for a “Jumbo Loan.” In 2010 the points spread shrunk to 0.6% points. Finally, these extremely low interest rates can be fixed for 30 years.
David Norwood-Central Coast Real Estate 
I tend to think real property purchases are being driven by perpetually loose monetary policies; lots of USD floating around the world these days. With every expansion of the Fed’s balance sheet the dollar loses purchasing power. Those with excess dollar holdings, particularly overseas governments, business owners, and investors, have been increasingly swapping paper currency for real assets: mines, precious metals, real estate, and even businesses.