Luxury Home Prices Stop Falling, Start Stabilizing
SEATTLE – A new report indicates that high-end home sales showed signs of recovery during the second quarter of 2019.
Sales of homes priced at or above $1.5 million slipped 4.6% on a year-over-year basis, marking the third straight quarter of declines, according to a report from Redfin. However, the drop was smaller than the 13.8% decrease in the first quarter.
As a result, the supply of homes priced at or above $1.5 million is on the rise, up 18.7% in the second quarter – the fifth consecutive quarterly increase and the biggest in two years.
Meanwhile, prices in this segment rose 1% to $1.64 million, compared with a 1.7% decline in the first quarter.
“Luxury home sales have been relatively soft since early 2018 when the tax code overhaul made it so that people with big mortgages and those living in high-tax states and counties couldn’t deduct as much from their annual tax bill. But wealthy Americans who would otherwise be considering a multi-million-dollar home purchase may now be a bit spooked that the economic expansion they’ve been enjoying for the past decade could soon be nearing its end,” says Redfin chief economist Daryl Fairweather.
“The Fed’s rate cut is unlikely to have a big impact on the course of the economy and especially on the luxury housing market, where buyers are the least rate-sensitive,” Fairweather adds. “As a result, I expect to see continued caution in the high-end market as the future of the economy becomes more clear to those whose wealth is most closely tied to it.”
Source: HousingWire (08/06/19) Falcon, Julia
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