Sales of luxury homes plummeted 17.8% year-on-year in the three months to April 30. This is a much larger decrease than non-luxury homes, which fell only 5.4% over the same period.
During the 2020 pandemic, when the market fell by 23.6%, there were only two sharp declines in the last decade.
The high-end housing market has cooled after last year’s sales surged 80%, thanks to rising interest rates, rising inflation, volatile stock markets and uncertain economic outlook. According to Redfin, higher mortgage rates can add thousands of dollars to the monthly cost of the most expensive homes.
Luxury home sales have begun to cool during this time last year, as shortages were created by wealthy remote workers who wanted to leave the city to take advantage of low mortgage rates, according to Redfin.
“The good news for buyers is that the market is balanced and competition is lessened,” said Elena Freck, a Redfin real estate agent in West Palm Beach, Florida. The price has been completely reduced. “
Prices for luxury homes are still rising — not as fast as they were a year ago. Median selling prices rose 19.8% year-on-year to $ 1.15 million from a peak of 27.5% in the spring of 2021. The year-on-year price increase before the pandemic was stable at less than 10%. Mr Freck said sellers are now ready to lower their asking prices as demand cools and housing shortages ease.
Redfin has been tracking this data since 2012, certifying luxury homes as the top 5% homes based on local market value. Non-luxury homes are in the 35th to 65th percentiles based on market value.
In Nassau County, New York, luxury home sales fell 45%. Metropolitan areas, including Oakland, California, West Palm Beach, Florida, Dallas, Texas, and Austin, all saw sales declines of more than 30%.
–CNN Business’s Anna Bahney contributed to this report.