Luxury Home Prices Stable But That’s Good News
For the first time in the last four quarters, luxury home prices are not dropping. They showed a relatively flat increase of three-tenths of a percent in the third quarter.
Sales of homes priced at or above $1.5 million increased 3.2 percent annually, a sign that the high-end market is moderating after recession fears marred the first two quarters, according to Redfin, a technology-powered real estate brokerage. The increase comes after three straight quarters of dipping sales in the luxury sector, including a 12 percent annual drop in the first quarter of 2019. Sales of homes priced below $1.5 million experienced a similar annual increase, with a 2.9 percent rise.
"Because recession fears peaked over the summer, I expected luxury home prices and sales to dip. But it appears that nerves alone weren't enough to scare off wealthy homebuyers," said Redfin chief economist Daryl Fairweather.
Supply of homes priced at or above $1.5 million rose 9.3 percent year over year in the third quarter, the sixth consecutive quarter of growth, albeit the smallest annual increase in a year. The big increase in luxury supply was largely driven by a boost in the number of high-priced homes hitting the market. New listings priced at or above $1.5 million rose 6 percent year over year in the third quarter, while new listings of homes priced below $1.5 million dropped 4 percent.
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