According to a Redfin report, the purchase of high-end homes grew 26% year-over-year through the three months leading up to May. Meanwhile, the purchase of affordable homes only grew 17.8% and mid-priced homes 14.8%.
Wealthy Americans have the advantage in today’s housing market. Throughout the past year, they have been able to save more money, work remotely, and reap the benefits of a strong stock market. In addition, an abundance of high-end homes have become available, allowing purchase activity to flourish.
San Francisco led the market in the sales of expensive homes with an 82.4% jump year-over-year, followed by Oakland, CA (+71.8%), Miami (+70.4%), San Jose, CA (+66%) and Las Vegas (+64.4%).
Redfin Chief Economist Daryl Fairweather, said, “So far, the economic recovery from the pandemic has disproportionately benefited Americans with bigger bank accounts. This means a lot of the demand for homes is coming from folks who are well-off, while many lower-income Americans sit on the sidelines because they've been priced out of the housing market due to surging prices.”
The price of high-end homes rose a record of 14.3% year-over-year during the three months ending on April 30. Prices of mid-priced homes increased a record 12.4% and prices of affordable homes climbed 10.2%. The “recordÚ changes in this context refer to Redfin's records, dating back to 2013.
“Growth in high-end-home sales is currently skewed toward some of the most expensive markets in the country—like the Bay Area and parts of Florida—which is fueling an uptick in high-end home prices,” Fairweather said. “The high-end sales growth in Florida is being fueled by an influx of affluent out-of-staters, while the gain in the Bay Area is more of a recovery from the massive decline in sales the region experienced at the start of the pandemic when scores of Americans left big cities. Folks may be starting to feel more comfortable putting down roots in major hubs now that they're gaining clarity on post-pandemic life.”
High-end home prices rose in all of the 50 most populated US metros, led by Austin, TX with a 24.1% jump, followed by San Diego, CA (+18%), Miami (+17.7%), West Palm Beach, FL (17.6%) and Phoenix (+17.2%). Many of the people migrating to these destinations have left big cities in search of more affordable space and sunshine during the pandemic.
Listings of high-end homes rose 19.3% year-over-year during the three-month period ending on April 30th, outpacing a 13.9% gain in affordable listings and a 9.1% increase in mid-priced listings.
Typical high-end homes spent 26 days on the market, which is 23 fewer than the same time last year. Affordable homes spent 24 days on the market (12 fewer days than last year) and mid-priced homes spent 20 days on the market (18 fewer days than last year).
Read more from Redfin's latest report on high-end home sales and prices.
