According to national real estate broker Redfin, the median sales value of luxury homes in the U. S. isU. S. sales rose 9% year-over-year to $1. 1 million in the third quarter, while the median sale value of non-luxury homes rose 3. 3% to $340,000. Both reached their record high point in the third quarter.
“High-net-worth homebuyers have more equipment to weather the typhoon of higher loan rates,” said Jason Aleem, Redfin’s senior vice president of real estate operations. “A lot of them can pay cash, which means they escape the higher loan rates. “Others decide to settle for a higher rate and refinance later, an expensive option that isn’t feasible for many low-income people. Wealthy Americans continue to spend big, largely due to pandemic savings and resilient home and inventory values.
More than two in five (42. 5%) luxury homes sold in the third quarter were purchased for cash, up from just over a third (34. 6%) a year earlier. By comparison, 28% of non-luxury homes sold were purchased with cash. , a small update starting in the third quarter of 2022.
“While many luxury buyers have the resources to keep going even when loan rates are high, stubbornly high rates and home values will likely leave some thriving space hunters on the sidelines in the coming months,” said Daryl Fairweather, lead economist at Redfin. “High costs, coupled with a decline in the number of luxury homes for sale, could limit the growth of luxury value. “
Housing was up 3% in the luxury market and down 21% in the non-luxury market
The overall origin of luxury homes for sale (active listings) increased 2. 9% year-over-year in the third quarter, to a record 20. 8% drop in the origin of non-luxury homes.
Similarly, new listings for luxury products rose 0. 3%, while new listings for non-luxury products fell 22%. New product listings in the luxury sector were below pre-pandemic points, but by a long shot. On the other hand, new listings in the non-luxury sector were at their lowest point in the third quarter since 2012.
One of the reasons luxury property listings have held up relatively well is that luxury homeowners are less likely to feel trapped in their low loan rate, either because they don’t have any loans or because they can move and settle for it. a higher rate.
Another explanation for why luxury real estate performs better is the increase in home construction. Newly built homes tend to be more expensive, which means they fall into the luxury tier.
Sales of luxury homes are falling, but at the same rate as sales of non-luxury properties
Luxury home sales fell 10. 6% year-on-year in the third quarter, with non-luxury property sales falling 17%.
Home sales are still lower than the previous year, overall, due to strong interest rates on loans. But the declines have eased, especially in luxury goods sales. That said, sales of luxury and non-luxury homes reached their lowest levels in the third quarter since 2014.
36% Luxury Home Sales in Tampa, Home for Many Spot Buyers
While luxury home sales declined year-over-year in most regions, 14 major U. S. metropolitan spaces were still in the U. S. U. S. cases experienced an increase. In Tampa, Florida, luxury goods sales were up 35. 8% year-over-year in the third quarter, the largest increase. in the country. It is followed by Las Vegas (33. 4%), Austin, Texas (14. 5%), Sacramento, California (10. 1%) and San Francisco (9. 6%).
“It’s an opportune time to buy spaces, and there are a lot of space buyers in Florida,” said Eric Auciello, sales manager for Redfin Tampa. “We still see a lot of thriving space hunters coming from the Northeast Coast and the West Coast because they want to cut taxes, adopt another policy, and/or be closer to their families. Tampa also has a lot of new construction, a lot of which is high.
New luxury listings in Tampa increased 13. 9% year-over-year in the third quarter, greater growth than in any major city in New York City.
Rising flood insurance prices are likely another explanation for why Tampa’s luxury market is outpacing its non-luxury market, Auciello said. Cash buyers are not required to purchase flood insurance. And for luxury buyers who get mortgages, their high-end homes are sometimes soaring above the ocean and built more sturdy, sometimes making them easier to insure. In addition, affluent buyers are more likely to be able to afford insurance premiums.
Metropolitan Luxury Market Highlights: Third Quarter 2023
Redfin metro data includes the 50 most populous metro areas in the US, with the exception of Houston, which the company removed due to a data issue. All changes below are year-over-year changes.
· Price: The median sale value of luxury homes peaked in New Brunswick, New Jersey (15. 3 percent), Virginia Beach, Virginia (11 percent) and Baltimore (8. 7 percent). It fell at the highest in Austin, Texas (-8. 8%), Oakland, California (-6%) and Seattle (-4. 6%).
· Supply: Active listings for luxury homes are up the highest in Austin (46%), San Antonio (25. 6%) and Nashville (22. 9%). They are down the maximum in Cincinnati (-19. 4%), Chicago (-18. 3%) and Newark, New Jersey (-16. 6%).
· New listings: New listings for luxury homes peaked in New York City (17. 1%), Tampa, Florida (13. 9%) and San Antonio (12. 7%). They fell the highest in Atlanta (-19. 8%), Newark (-18. 4%) and Chicago (-17. 2%).
· Home sales: Luxury home sales peaked in Tampa (35. 8%), Las Vegas (33. 4%) and Austin (14. 5%). Peaks fell in New York (-33. 5%), Philadelphia (-23. 2%) and Baltimore (-23%).
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