Sales of luxury homes fell 18%, the largest drop since the beginning of the epidemic

Seattle – (work wire) – (NASDAQ: RDFN) — Sales of US luxury homes fell 17.8% year-on-year during the three months ending April 30, the largest drop since the onset of the coronavirus pandemic that sent shock waves through the housing market. In comparison, sales of non-luxury homes fell 5.4%. That’s according to luxury real estate trend analysis from Redfin (www.redfin.com), a tech-backed real estate brokerage. The analysis breaks down all US residential properties into price tiers based on Redfin’s estimates of home market values ​​and identifies luxury homes as the 5% more expensive than homes in each metro area.

The luxury goods market has cooled off as rising interest rates, a tepid stock market, inflation and economic uncertainty hamper demand. For luxury buyers, a higher mortgage rate can mean a monthly housing bill worth over thousands of dollars. The annual slowdown is also a reflection of the high-end home market returning to Earth after increasing sales of nearly 80% a year ago.

Luxury sales growth began to slow in the spring and summer of 2021 amid a severe shortage of high-end properties for sale, which limited the number of homes that could be sold. Although the inventory crunch has begun to subside, the shortage of luxury homes on the market is still likely to contribute to the decline in luxury sales.

“The pool of people eligible to buy luxury real estate is shrinking because the stock market is going down and mortgage rates are going up,” said Elena Flick, a Redfin real estate agent in West Palm Beach, Florida. “The good news for buyers is that the market is becoming more balanced and competition is declining. Of course, this does not help the dozens of Americans who are fully priced.”

Higher interest rates have slowed the housing market as a whole in recent weeks. The average 30-year fixed-rate mortgage rate was 5.23% during the week ending June 9, down slightly from the 2022 peak of 5.3% but still well above 3.11% at the end of last year. Mortgage rates for mega loans, the type most effective borrowers use, have also gone up. The interest rate on a massive 30-year loan was 5.06% as of June 8, up from 3.23% at the end of 2021.

“I had one seller in Delray entered into a contract to buy his home for over $2 million in March, in the middle of higher interest rates,” Flick said. Buyers backed off because they realized mortgage payments would rise by more than $3,000 per month as the interest rate rose. They can no longer comfortably afford the house.”

Luxury home prices are still rising, but not as fast as they were a year ago

The median sale price of luxury homes rose 19.8% year over year to $1.15 million during the three months ending April 30 — roughly the same rate as the growth rate for non-luxury homes. While this is still above pre-pandemic levels of less than 10%, it is down from a peak of 27.5% in the spring of 2021.

The luxury inventory crisis recedes as luxury listings rise for the first time this year

The inventory crunch is easing into the high-end housing market as falling sales leave more homes available for purchase. The supply of luxury homes for sale fell 12.4% year over year during the three months ended April 30. That compares to a record drop of 24.6% during the summer of 2021, when there was still intense demand for high-end homes. The supply of non-luxury homes fell 8.4% during the three months ending April 30.

The increase in new luxury product listings is one reason why the overall supply of luxury has not fallen as sharply as it was last year. New listings for luxury homes rose 1.1% year-over-year during the three months ending April 30, the first increase since the summer of 2021.

Metro Highlights: Luxury home sales fall sharply on Long Island and increase in New York City

  • home sales: Luxury home sales fell in all but one of the top 50 metros. The largest decrease was in Nassau County, New York (-45.3% year on year), followed by Oakland, California (-35.1%), Dallas (-33.8%), Austin, Texas (-33%) and West Palm Beach, Florida (-32.8 %). The only increase was in New York (+30%).
  • the prices: The median sale price of luxury homes increased in all of the first 50 metro areas. The highest percentage was in Tampa, Florida (+33% compared to last year), followed by San Diego (+31.4%), Jacksonville, Florida (+31.2%), Nashville (+30.3%) and Fort Worth, Texas (+29.4%). ).
  • New listings: New listings for luxury homes increased in 16 of the top 50 metros. The biggest gain was in Warren, Michigan (+32.2% year over year), followed by New York (+31.1%), San Antonio (+22.8%), Detroit (+22.3%) and Nashville (+18.4%). The largest declines were in Oakland (-28.4%), Los Angeles (-27.6%), Anaheim, California (-25.2%), San Francisco (-24.9%) and San Jose, California (-23.6%).
  • supply: Active listings for luxury homes have fallen in all but five of the 50 largest metro areas. The biggest declines were in Anaheim (-38.7% year on year), Los Angeles (-36.1%), Miami (-33.7%), San Jose (-32%) and Oakland (-31.3%). Central areas that saw increases were San Antonio (+22.4%), Warren (+15.1%), Columbus, Ohio (+7.3%), Detroit (+4.7%) and Nashville (+0.1%).

The full report, complete with graphs and data for the 50 largest metro areas, is available at https://www.redfin.com/news/luxury-home-sales-april-2022.

About Redfin

Redfin (www.redfin.com) is a technology-driven real estate company. We help people find a place to live with brokerage, iBuying, rentals, lending, property insurance and renovation services. We sell homes for more money and charge half the fees. We also operate the country’s #1 real estate brokerage website. Our home-buying clients see homes first through on-demand tours, and our lending and title services help them close quickly. Customers who are selling a home can take an instant cash offer from Redfin or ask our renovations crew to fix their home for sale for top dollar. Our rental business enables millions across the country to find apartments and homes for rent. Since our launch in 2006, we’ve saved customers over $1 billion in commissions. We serve more than 100 markets across the United States and Canada and employ more than 6,000 people.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. For housing market trends and data download, visit the Redfin data center. To be added to Redfin’s press release distribution list, send an email to [email protected] To view the Redfin Press Center, click here.

%d bloggers like this: