SEATTLE--(BUSINESS WIRE)--Redfin (www.redfin.com), the next-generation real estate brokerage, today reports that home prices in the luxury market, which Redfin defines as the priciest 5 percent of properties, increased a mere 0.4 percent in the second quarter from a year earlier. In contrast, prices in the bottom 95 percent of the market grew 10 times faster, increasing 4 percent during the same time period.
Meanwhile, sales of homes priced $1 million or more surged in the second quarter, increasing 14.2 percent from a year earlier. In fact, markets that saw the biggest decrease in luxury home prices had one thing in common - a large pickup in the number of high-end homes for sale since last year. As prices in Fort Lauderdale, Fla. slumped 23 percent from last year, inventory of homes priced $1 million or more surged by 42 percent. Redfin saw similar double-digit growth in million-dollar homes for sale in other cities on the biggest luxury losers list including Santa Rosa, Calif. (37%), Houston (44%), Austin, Texas (27%), and Irvine, Calif. (27%). Of the 10 biggest price losers, only Los Angeles had a drop in both sale prices and inventory.
Not all markets had a slowdown; several cities had big luxury price gains in the second quarter. The biggest winner was Palm Beach Gardens, Fla., with a whopping 42 percent increase in average luxury sale price from a year ago. Other cities that saw big increases in luxury sale price from a year ago were Bend, Ore. (33%), Huntington Beach, Calif. (27%), Boulder, Colo. (26%) and Bellevue, Wash. (25%).
Of the more than 138 luxury markets studied, Miami Beach, Fla. was the most unequal. At nearly $6.59 million, average luxury prices were nearly 12 times greater than average prices in the other 95 percent of the market. In fact, the nine most unequal metros were all located on the southeast coast of Florida.
“The high cost of living on the coast has become too much for all but the most well-heeled buyers,” says Pierre Shaheen, a Redfin agent in Fort Lauderdale. “The stronger U.S. dollar hasn’t turned off foreign buyers, but high prices and the recent spike in flood insurance rates are forcing most middle-class buyers to look westward for homes. This means the luxury market is much hotter than the rest of the market here.”
To read the full report, complete with market-by-market data on the biggest luxury-market winners and losers, please visit: https://www.redfin.com/research/reports/special-reports/2015/luxury-home-prices-essentially-flat-in-the-second-quarter.html.
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About Redfin
Redfin (www.redfin.com) is a next-generation real estate brokerage that represents people buying and selling homes. Founded by technologists, Redfin employs a team of experienced, full-service real estate agents who are advocates, not salespeople, earning customer-satisfaction bonuses, not just commissions. Redfin.com features all the broker-listed homes for sale, as well as for-sale-by-owner properties that don't pay brokers a commission. Redfin also offers online tools, built by its own software engineers, that make the entire process of buying or selling a home easier and more fun. The company serves major markets across the U.S. and has closed nearly $20 billion in home sales. In 2012, Redfin was named one of The DIGITAL 100: World's Most Valuable Private Tech Companies by Business Insider.
