Redfin reports that luxury home prices grew
more than twice as fast as non-luxury homes in the second
quarter
(NASDAQ: RDFN) — The typical U.S. luxury home sold for a record
$1,180,000 in the second quarter, up 8.8% from a year earlier—the
biggest increase in nearly two years. Non-luxury home prices grew
at less than half that pace, rising 3.8% to a record high median of
$342,500, according to a new report from Redfin (redfin.com), the
technology-powered real estate brokerage.
Redfin defines luxury homes as those estimated to be in the top
5% of their respective metro area based on market value, and
non-luxury homes as those estimated to be in the 35th-65th
percentile based on market value.
“The luxury market has withstood the havoc wreaked by high
mortgage rates this year, thanks to an abundance of all-cash
buyers,” said Redfin Senior Economist Sheharyar Bokhari. “Now that
sales are stabilizing and more homes are being listed for sale,
it’s unlikely that luxury prices will continue to grow at quite as
high a rate.”
High-end buyers were less likely to be impacted by the rate
lock-in effect and uncertainty around the direction of mortgage
rates, which sat above 7% for much of the quarter. They were also
more likely to have benefited from a strong stock market and high
levels of home equity. This spring, 43.7% of luxury homes sold were
purchased with all cash, up from 43.2% a year earlier. (Note the
all-cash data covers the three months ending in May, the most
recent month for which all-cash data is available).
Luxury home sales stay positive as non-luxury sales
fall
The number of luxury homes sold in the second quarter was
virtually unchanged from a year earlier, ticking up by 0.2%,
marking the third consecutive quarter of sales growth. Non-luxury
home sales fell 3.4% to the lowest second-quarter number in a
decade.
“There is still strong demand for well-priced, high-end
properties, especially those which are presented beautifully and
move-in ready,” said Crystal Zschirnt, a Redfin Premier agent in
Fort Worth, TX, where luxury home sales were up 9.7% year on year
and typically sold four days faster than non-luxury homes. “We had
a client recently list a property for $2.4 million that we ended up
selling for $2.6 million. We are still seeing multiple offers in
situations where a property is priced accurately, visually
appealing and doesn’t need any work.”
Even though the overall market is seeing far less activity than
it did pre-pandemic—in large part due to an ongoing supply
shortage—the luxury market has made up more ground since. Compared
to the second quarter of 2019, luxury sales were down 12.8%, while
non-luxury sales were down 20.1%.
Luxury home inventory grows to highest level in 3
years
Luxury inventory rose 9.7% year over year, the fourth
consecutive quarter of growth following a major drop off during and
after the pandemic. Non-luxury inventory rose 3.9%. It’s worth
noting inventory in both categories is still well below
pre-pandemic levels.
The number of new listings of luxury homes increased 11%, far
outpacing the 2.6% increase in new listings of non-luxury
homes.
Luxury and non-luxury homes sitting longer on market
With inventory increasing, luxury homes stayed on the market a
median 40 days—two days longer than a year earlier. Non-luxury
homes also took longer to sell—a median 31 days—up from 28 days
last year.
“We are seeing luxury homes selling within 30-45 days, but
that’s a lot longer than in 2022 when they were flying off the
shelf,” said Juan Castro, a Redfin Premier agent in Orlando, FL,
where inventory ballooned 22.7% in the second quarter, year over
year. “International cash buyers are still driving activity, but we
have seen a slowdown in local buyers, as it’s really hard to upsize
to a luxury home with a 7% mortgage rate.”
Metro-Level Luxury Highlights: Q2 2024
Redfin’s metro-level luxury data includes the 50 most populous
U.S. metros. Some metros are removed from time to time, to ensure
data accuracy. All changes noted below are year-over-year
changes.
- Prices: The median sale price of luxury homes rose most
in Providence, RI (16.5% increase to $1,395,000), San Jose, CA
(16.4% increase to $4,830,000) and Nassau County, NY (14.3%
increase to $2,572,500). It fell in just two metros, in New York
(-3.2% to $3,200,000) and Austin, TX (-1.5% to $1,650,000).
- Sales: Luxury home sales increased most in Nashville,
TN, (20.4%), Tampa, FL (14.3%) and Seattle (13.9%). They decreased
most in Newark, NJ (-20.1%), Baltimore, MD (-15.5%) and
Indianapolis, IN (-12.4%).
- Active listings: The total number of luxury homes for
sale increased most in Tampa, FL (29.6%), Jacksonville, FL (28.9%)
and San Antonio, TX (26.6%). Total inventory fell the most in
Newark, NJ (-16%), Chicago (-9.8%) and Atlanta (-6.2%).
- New listings: New listings of luxury homes increased
most in Providence, RI (31.5%), Miami (28.1%) and Tampa, FL
(27.6%). New listings fell in 11 metros, with the biggest declines
in Newark, NJ (-18.3%), San Francisco (-15.4%) and Chicago
(-8.9%).
- Speed of sales: Luxury homes sold fastest in Seattle
with a median of six days, while Detroit, San Jose, CA and
Indianapolis, IN all recorded a median of 10 days. They sold
slowest in Miami (114 days), West Palm Beach, FL (108) and Nassau
County, NY (81).
10 Most Expensive U.S. Home Sales: Q2 2024
- Glenwood Springs, CO (Aspen): $77M
- Glenwood Springs, CO (Aspen): $66.5M
- Los Angeles, CA: $62.8M
- Miami, FL (Miami Beach): $62.5M
- Glenwood Springs, CO (Aspen): $59M
- West Palm Beach, FL (Palm Beach): $51.3M
- West Palm Beach, FL (Highland Beach) $50M
- West Palm Beach, FL (Palm Beach): $49.6M
- Glenwood Springs, CO (Aspen): $48.8M
- Glenwood Springs, CO (Woody Creek): $46M
To view the full report, including charts, methodology and
additional metro data, please visit:
https://www.redfin.com/news/q2-2024-luxury-report
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate
company. We help people find a place to live with brokerage,
rentals, lending, title insurance, and renovations services. We run
the country's #1 real estate brokerage site. Our customers can save
thousands in fees while working with a top agent. Our home-buying
customers see homes first with on-demand tours, and our lending and
title services help them close quickly. Customers selling a home
can have our renovations crew fix it up to sell for top dollar. Our
rentals business empowers millions nationwide to find apartments
and houses for rent. Since launching in 2006, we've saved customers
more than $1.6 billion in commissions. We serve more than 100
markets across the U.S. and Canada and employ over 4,000
people.
Redfin’s subsidiaries and affiliated brands include: Bay Equity
Home Loans®, Rent.™, Apartment Guide®, Title Forward® and
WalkScore®.
For more information or to contact a local Redfin real estate
agent, visit www.redfin.com. To learn about housing market trends
and download data, visit the Redfin Data Center. To be added to
Redfin's press release distribution list, email press@redfin.com.
To view Redfin's press center, click here.
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version on businesswire.com: https://www.businesswire.com/news/home/20240725206013/en/
Redfin Journalist Services: Angela Cherry press@redfin.com
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