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Luxury home price appreciation is slowing down, per new data from real estate listing site Redfin. In the second quarter of 2018, luxury home prices grew 5.2 percent, 2.1 percent slower than the year before.
Sheharyar Bokhari, senior economist at Redfin, explains, “Demand for luxury homes in the U.S. has strengthened this year because stock-market gains and tax reform put more money in the pockets of the wealthy,” adding that tight inventory is still a stressor at this price tier of the market. “The good news is that inventory declined at a slower rate last quarter, which has alleviated some of the upward pressure on prices, resulting in slightly lower price growth in the luxury market last quarter.” The average sale price for the top five percent of homes was $1.87 million in the second quarter of 2018, with 1.8 percent of homes sold above the list price.
Luxury homes went under contract after an average of 65 days on market, six fewer days than the second quarter of last year, and the fastest pace on record since Redfin began tracking this metric in the first quarter of 2009. The market sped up even more for non-luxury homes, which spent an average of 51 days on market, 10 fewer days than last year. Luxury homes sold fastest in Oakland, Calif., where they found buyers in an average of 17 days, followed by San Jose, Calif. (19); San Francisco (29); Seattle (43); and Washington, D.C. (44).
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