Luxury home sales fall amid price hikes and economic turmoil
The monarchy party in America has long since ceased.
Sales of luxury homes fell 28% during the three months ending August 31, compared to the same period last year, according to a new Redfin report.
The numbers show that amid rising interest rates and mounting economic uncertainty, wealthy buyers are now turning away from the most expensive homes in droves.
“High-end home hunters are very shocked when they see the impact of higher mortgage rates on paper,” said Daryl Fairweather, chief economist at Redfin.
“For buyers of luxury goods, a high interest rate can equate to a monthly housing bill worth thousands of dollars.”
Redfin defines luxury homes as being among the top 5% in terms of asking price.
“Luxury goods are often the first thing that is cut out when uncertain times force people to re-examine their finances,” Fairweather said.
The free fall of 28% was easily the largest drop ever recorded since Redfin began analyzing the scale in 2012.
The previous mark was 23%, set at the start of the pandemic in 2020 as lockdowns continued and the property market stalled.
Sales of non-luxury homes also saw an unprecedented decline of 19.5% compared to the same period, according to the report.
California’s expensive cities saw notable drops in luxury sales, with Oakland posting a staggering 63.9% drop and San Jose down 59.6%.
Miami, which has seen massive price hikes in recent years, saw the third largest drop in luxury goods sales at 55%.
New York saw a more moderate decline in this category of 11.8%.
While relocations have slowed considerably, Florida still saw massive rises in median home sale prices in the three months ending August 31.
The Sunshine State was among the top ten cities with the highest increases.
Tampa Bay took the top spot, with median home prices for the three months ending August 31 up 39.3% over the same period last year.
Average sales in New York remained largely flat, posting a 4% increase over that period.