The analysis tracks home sales in more than 1,000 cities across the country and defines the luxury market as the top 5% most expensive homes sold in the city in each quarter. The average price for non-luxury homes was $333,000, up 6% compared to a year earlier.
Persistent demand, fueled by stock market gains, along with shrinking supply contributed to the price increase. The number of homes for sale priced at or above $1 million fell 23.8% compared to the same period last year, marking three consecutive quarters of declines in luxury supply. The number of homes priced at or above $5 million followed the same trend, down 23.4%.
“The stock market hit all-time highs with gains in nearly every sector last quarter, instilling confidence among the wealthiest home buyers,” said Redfin chief economist Nela Richardson. “As a result, we saw double-digit growth in luxury home sales in the last months of the year.”
Luxury Homes Prices Up
Sales of homes priced at or above $1 million were up 15.2% from a year ago, and sales of homes priced at or above $5 million were up 13.7%.
Luxury homes moved off the market quickly, typically finding a buyer in an average of 75 days, eight fewer days than in the fourth quarter of 2016.
|Q4 Market Summary||Luxury Market (Top 5%)||Rest of Market (Bottom 95%)|
|Average Sale Price||$1.76 million||$333,000|
|Average Sale Price YoY||7.4%||6.1%|
|Average Sale Price QoQ||3.1%||-0.9%|
|Average Days on Market||75||59|
|Days on Market YoY||8 fewer days than last year||7 fewer days than last year|
|Percent of Homes that Sold Above List Price||1.5%||20.9%|
Seven Florida beachfront communities saw the average sale price of luxury homes increase by more than 25% year over year. In Sarasota and Delray Beach, luxury prices shot up 45.6% and 41.3% respectively, the highest fourth-quarter luxury price gains of all cities Redfin analyzed.
San Francisco posted the largest year-over-year decline in luxury home prices, down 12% to an average $5.03 million.
While the strong stock market boosted confidence in other housing markets, some would-be luxury buyers in San Francisco held back.
“The luxury market in San Francisco slowed through 2017,” said Miriam Westberg, a Redfin agent from San Francisco. “An unusually low number of initial public offerings among local companies meant fewer cash-flush buyers. Competition, and therefore prices, dropped as many affluent buyers opted to invest in the stock market instead.”
Article By BUILDER Staff