Luxury Prices Climbing 3x Faster Than Typical Homes

Well-to-do buyers are avoiding high interest rates with cash purchases, pushing luxury home prices up even more than regular houses. The median luxury home price rose 9% YOY in Q3 2023 to $1.1 million, the highest third quarter on record, according to a new analysis from Redfin. It’s also three times faster than non-luxury prices, which were up 3.3% to $340,000 in the same period. Luxury sales seem to have followed a similar pattern as regular homes, with sales and listings falling last year before reversing course in 2023. Now, limited inventory has increased competition and pushed prices higher. But while mid-tier buyers suffer high rates, high-end buyers bypass them with cash, avoiding mortgages altogether. More than two in five…

Luxury Home Sales See Biggest Dip Since 2012

Luxury home sales tanked by 28.1% YOY in the three months ending August 31, the biggest drop since 2012, according to new Redfin data. The decline overtook even the 23.2% drop that happened at the beginning of the pandemic, when home sales slowed to a crawl in every area. Non-luxury home sales also fell by the largest margin on record, but in a far less dramatic drop of 19.5%, a change of 0.5%. The same stressors that are beating down the non-luxury market are impacting high-end buyers: low inventory, rising rates, and economic uncertainty. “High-end-house hunters are getting sticker shock when they see the impact of rising mortgage rates on paper. For a luxury buyer, a higher interest rate can…