Redfin reports that the sales of homes priced at or higher than $1.5 million rose 3.2% annually, and the average sale price for luxury homes rose 0.3% year-over-year to $1.6 million in Q3 2019.
Q3 2019 stops a trend of three consecutive quarters of declines. Redfin defines homes as “luxury” if it is among the 5% most expensive homes sold in the quarter. The other 95% of homes on the market saw prices increase 3.6% annually to an average of $319,000.
Luxury home sales witnessed a 12% annual drop during Q1 2019. The sales of homes priced below $1.5 million rose 2.9% during Q3 2019.
“Because recession fears peaked over the summer, I expected luxury home prices and sales to dip. But it appears that nerves alone weren’t enough to scare off wealthy homebuyers,” said Redfin Chief Economist Daryl Fairweather. “The U.S. economy grew faster than expected in the third quarter, partly as a result of healthy consumer spending. Those results, along with flat luxury home prices and rising sales, go to show that Americans are basing their spending habits on their own personal financial situation rather than concerns about global economic tensions. For many, that means strong incomes and good employment prospects.”
The supply of homes priced at or above $1.5 million rose 9% year-over-year during the quarter—the sixth-consecutive quarter of growth, but also the smallest increase of the year. Conversely, the supply of homes priced under $1.5 million fell 6.9% during Q3 2019.
Redfins states that supply was boosted by the share of new listings prices over $1.5 million rising 6% year-over-year during Q3 2019. New listings of homes under $1.5 fell 4%.
Luxury homes were on the market for 20 more days than the remaining 95% of the market—57 days compared to 37. Additionally, just 22% of homes are sold above their list prices, which is slightly lower than the 24.6% for the rest of the market.
More than 27% of homes sold above their list price last year.