Luxury ain’t what it used to be. Not in terms of prices, and not in terms of sales activity.
It used to be that prices at $1 million and up defined the luxury tier of the housing market. But a new Redfin study found that the new norm hit $1.25 million in August. That’s a record for the month but down from the all-time high of $1.35 million set in March, a month when prices are typically higher.
Luxury home prices grew nearly three times faster than those of non-luxury homes, which increased 1.4% to a median of $370,000.
However, Redfin also found that “luxury” home sales fell 0.7% in August to the lowest level since the real estate brokerage began keeping records more than a decade ago.
“Sales have slowed across all price tiers, and luxury homes are no exception,” said Redfin Senior Economist Sheharyar Bokhari. “Last year was super slow in the luxury market and this year is even slower.”
High-end buyers usually keep the market afloat because they’re less tied to mortgage rates, often buying in cash, and can prioritize lifestyle over affordability. But right now, said Bokhari, many of those buyers are waiting on the sidelines, holding out for more certainty around the economy and the housing market.
Sales were stagnant even as the number of luxury homes on the market grew 9.5% in August to the highest level for the month since 2020. The number of non-luxury homes for sale grew at a faster clip of 13.4% to reach the highest August level since 2019.
It is also taking a bit longer for luxury properties to go under contract than a year ago — 46 days versus 43. And only 28.3% went under contract within two weeks in August, down 1.9 percentage points from a year ago and the lowest August share since 2020.
By comparison, lower-priced dwellings also took considerably longer to sell than a year ago, with the median days on market increasing from 33 to 40. The share that went under contract within two weeks fell 4.2 percentage points to 34.4%.
“Luxury buyers are moving like molasses,” said Meme Loggins, a Redfin agent in Portland, Ore. “They wait for $100,000 price drops and then negotiate over tiny issues, like a leaking sink.”
The slow market is wearing sellers down too, Loggins said. “I had a seller with a gorgeous million-dollar home in a highly desirable area of Portland pull the listing from the market recently because she was exhausted from trying to keep it ready for showings for so long.”
