Luxury Home Prices Reach Record Highs

Luxury home prices in the U.S. have reached record highs, rising nearly 9% in the first quarter of 2024, twice the price of non-luxury homes.

a report The median price for luxury homes in the U.S. in the first quarter of this year was approximately $1,225,000, representing an 8.7% year-over-year increase, according to Redfin research. Meanwhile, the median price for non-luxury homes was about $345,000, up 4.6% from a year ago.

Redfin’s report classifies luxury homes as being “estimated to be in the top 5% of their respective metropolitan areas based on market value.” However, non-luxury homes were defined as homes “estimated to be in the 35th and 65th percentile based on market value.”

In addition to the increase in the prices of luxury homes, sales of luxury homes increased by 2.1% year-on-year, while sales of non-luxury homes decreased by 4.2%.

The report said sales of luxury homes are “outpacing” sales of non-luxury homes because “many luxury home buyers” do not see rising mortgage rates as a “deterrent”. He pointed out that 47% of luxury homes were purchased for 100 yen in cash. Beginning of 2024.

“People who can afford to buy luxury homes are jumping in now because they believe prices will continue to rise,” explained David Palmer, a Redfin Premier agent in Seattle, Washington. “They are ready to buy with less anxiety and more optimism. It’s a similar sentiment on the seller side. As luxury home prices continue to rise, homeowners are looking to cash out their equity. It feels like a good time to do so. Even though mortgage rates are still rising and demand isn’t as high as it was during the pandemic, many home buyers and sellers feel the worst of the housing recession is behind us. Masu.”

The report also found:

Luxury home prices are rising primarily because demand for luxury homes is holding up better than demand for mid-range homes. Luxury home sales are on the rise, in part because many luxury home buyers are undaunted by high mortgage rates, with the proportion of luxury homes purchased with cash at an all-time high. There is. The number of new luxury homes is booming, but it’s not enough to stem the rise in prices associated with rising demand. The total supply of luxury homes remains far below pre-pandemic levels.

According to the report, there were more luxury homes available on the real estate market in the first quarter of this year compared to a year ago, increasing by 12.6%. Meanwhile, the number of non-luxury home sales decreased by 2.9% during the same period.

Providence, Rhode Island, Virginia Beach, Virginia, and New Brunswick, New Jersey saw the largest increases in median sales prices for luxury homes.

In Providence, the median price of a luxury home rose 16.2 per cent to $1.4 million, and in New Brunswick the median price of a luxury home rose 15 per cent to $1.9 million. In Virginia Beach, the median luxury home price rose 12.8% to $1.1 million.

In areas such as New York City and Austin, Texas, median sales prices have fallen. In New York City, sales fell 9.9% to $3,250,000, and in Austin, the median sales price fell 6.9% to $1,629,300.