Luxury home sales fall 18%, the biggest drop since the start of the pandemic | national company

SEATTLE–(BUSINESS WIRE)–June 10, 2022–

(NASDAQ: RDFN) – U.S. luxury home sales fell 17.8% year-over-year in the three months to April 30, the biggest drop since the start of the coronavirus pandemic has sent shockwaves through the housing market. In comparison, sales of non-luxury homes fell 5.4%. It is according to a luxury real estate trend analysis by Redfin ( www.redfin.com ), technology-powered real estate brokerage. The analysis divides all US residential properties into price tiers based on Redfin estimates of home market values ​​and defines luxury homes as the most expensive 5% of homes in each metropolitan area.

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(Graphic: Business Wire)

The luxury market is cooling as soaring interest rates, a tepid stock market, inflation and economic certainty dampen demand. For a luxury buyer, a higher mortgage rate can mean a monthly housing bill that costs thousands more. The year-over-year slowdown also reflects the market’s return to earth for high-end homes after a nearly 80% increase in sales a year ago.

Luxury sales growth began to slow in the spring and summer of 2021 amid an extreme shortage of high-end properties for sale, which limited the number of homes that could be sold. Although the inventory crisis has started to ease, the shortage of luxury homes on the market is still likely contributing to the decline in luxury sales.

“The pool of qualified people to buy luxury properties is shrinking because the stock market is down and mortgage rates are rising,” said Elena Fleck, Redfin real estate agent in West Palm Beach, Florida. “The good news for buyers is that the market is leveling out and the competition is easing. Of course, this does not help the dozens of Americans whose price has been completely exceeded.

Rising interest rates have triggered a slowdown in the housing market as a whole in recent weeks. The average 30-year fixed mortgage rate was 5.23% in the week ending June 9, down slightly from the 2022 high of 5.3%, but still significantly above 3.11% at the end of last year. Mortgage rates for jumbo loans, the type most luxury borrowers use, have also increased. The rate on a 30-year jumbo loan was 5.06% as of June 8, compared to 3.23% at the end of 2021.

“I had a seller in Delray who took out a contract on his house for over $2 million in March, right in the middle of an interest rate hike,” Fleck said. “Buyers pulled out because they realized their mortgage payment would go up by more than $3,000 a month with the higher interest rate. They could no longer afford the house comfortably.

Luxury home prices are still rising, but not as fast as a year ago

The median selling price of luxury homes rose 19.8% year-over-year to $1.15 million in the three months ending April 30, roughly the same rate growth than non-luxury homes. Although this figure is still above pre-pandemic levels of less than 10%, it is down from the peak of 27.5% in spring 2021.

High-end inventory slump eases as luxury listings surge for first time this year

The inventory crisis in the high-end housing market is easing as lower sales leave more homes available for purchase. The supply of luxury homes for sale fell 12.4% year-over-year in the three months to April 30. This compares to a record drop of 24.6% during the summer of 2021, when demand for high-end homes was still intense. The supply of non-luxury homes fell 8.4% in the three months ending April 30.

An increase in new luxury listings is one reason why the overall luxury supply is not declining as sharply as last year. New luxury home listings rose 1.1% year-over-year in the three months ending April 30, the first increase since the summer of 2021.

Metro Highlights: Luxury Home Sales Drop Sharply on Long Island, Rise in New York

  • Door-to-door sales: Luxury home sales fell in all but one of the top 50 metros. The largest decline was recorded in Nassau County, NY (-45.3% year-over-year), followed by Oakland, CA (-35.1%), Dallas (-33.8%), and Austin, TX (-33%) and West Palm Beach, FL (-32.8%). The only increase was recorded in New York (+30%).
  • Prices: The median selling price of luxury homes increased in the top 50 cities. It increased the most in Tampa, FL (+33% year-over-year), followed by San Diego (+31.4%), Jacksonville, FL (+31.2%), Nashville (+30.3%) and Fort Worth, TX (+29.4%). ).
  • New registrations: New luxury home listings increased in 16 of the top 50 cities. The largest gain was in Warren, MI (+32.2% year-over-year), followed by New York (+31.1%), San Antonio (+22.8%), Detroit (+ 22.3%) and Nashville (+18.4%). The largest declines were recorded in Oakland (-28.4%), Los Angeles (-27.6%), Anaheim, CA (-25.2%), San Francisco (-24.9%) and San Jose , Sales (-23.6%).
  • Provide: Active luxury home listings fell in all but five of the top 50 metros. The largest declines were recorded in Anaheim (-38.7% YoY), Los Angeles (-36.1%), Miami (-33.7%), San Jose (-32%) and Oakland (- 31.3%). Metros that saw increases were San Antonio (+22.4%), Warren (+15.1%), Columbus, OH (+7.3%), Detroit (+4.7%) and Nashville (+ 0.1%).

The full report, along with charts and data for the 50 largest metropolitan areas, is available at https://www.redfin.com/news/luxury-home-sales-april-2022.

About Redfin

Redfin( www.redfin.com ) is a technology-driven real estate company. We help people find a home with brokerage, instant home buying (iBuying), rental, loan, title insurance, and home improvement services. We sell houses for more money and charge half the fees. We also run the #1 real estate brokerage site in the country. Our homebuyer clients see homes first with on-demand viewings, and our loan and title services help them close quickly. Customers selling a home can receive an instant cash offer from Redfin or have our renovation team repair their home to sell for the best price. Our rental business helps millions of people across the country find apartments and houses to rent. Since launching in 2006, we’ve saved our clients over $1 billion in commissions. We serve over 100 markets in the United States and Canada and employ over 6,000 people.

For more information or to contact a local Redfin estate agent, visit www.redfin.com. To learn more about housing market trends and download data, visit Redfin Data Center. To be added to Redfin’s press release mailing list, email press@redfin.com. To see Redfin’s press center, Click here.

Show source version on businesswire.com:https://www.businesswire.com/news/home/20220610005078/en/

CONTACT: Redfin Journalist Services:

Alina Ptaszynski, 206-588-6863

press@redfin.com

KEYWORD: WASHINGTON UNITED STATES NORTH AMERICA

SECTOR KEYWORD: SOFTWARE CONSTRUCTION & REAL ESTATE TECHNOLOGY INTERNET LUXURY OTHER CONSTRUCTION & REAL ESTATE RESIDENTIAL & REAL ESTATE TRADE

SOURCE: Redfin

Copyright BusinessWire 2022.

PUBLISHED: 06/10/2022 07:00 AM/DISC: 06/10/2022 07:02 AM

http://www.businesswire.com/news/home/20220610005078/en

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