It’s been a tough go for luxury home sales during the last three consecutive quarters. Prices have been flat or reduced and sales volume has been down. But now, in Q3 2019 according to Redfin, luxury home prices increased +0.3% y/y to a nationwide average price of $1.6M. Additionally, sales of homes priced at or above $1.5M increased +3.2% in Q3 2019 including the -12% annual drop in Q1 2019.
(Redfin indicated too that sales of homes priced at or below $1.5M, or 95% of all homes, increased +3.6% to an average of $319,000 in Q3 2019.)
Daryl Fairweather, Redfin’s chief economist, said, “The US economy grew faster than expected in Q3 2019, partly as a result of healthy consumer spending. Those results, along with flat luxury home prices and rising sales, go to show that Americans are basing their spending habits on their own personal financial situation rather than concerns about global economic tensions. For many, that means strong incomes and good employment prospects.”
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The supply of $1.5M+ homes increased some +9.3% y/y, continuing an uninterrupted inventory rise of luxury homes for the sixth consecutive quarter in a row. Fairweather attributed that rise in inventory to the growth in the number of new luxury listings hitting the market. That growth in luxury listings came in at +6% y/y during Q3 2019 while simultaneously, the number of new listings of homes priced below $1.5M dropped -4%.
The five top areas with the largest increases in luxury home prices included:
- West Palm Beach FL – +128.3%
- Clearwater FL – +49.3%
- Delray Beach FL – +47.3%
- Paradise NV – +19.8%
- Raleigh NC – +19.3%
Elena Glatko, a real estate agent with Redfin, offered her insights regarding this uptick in luxury home pricing and volume to Alcynna Lloyd of HousingWire. “…I’ve noticed that both luxury buyers and sellers feel that real estate is one of the assets least susceptible to economic changes. They believe that over time, luxury real estate is a better investment than the stock market.”
Thanks to HousingWire’s Alcynna Lloyd for source data.