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Luxury home sales post biggest drop since pandemic began – Boston News, Weather, Sports

(CNN) — Even the wealthiest Americans are beginning to feel the effects of economic uncertainty as luxury home sales posted their biggest drop since the pandemic began, a redfin analysis found.

Luxury home sales plunged 17.8% year-on-year in the three months ended April 30. That’s a much larger drop than non-luxury real estate, which fell just 5.4% over the same period.

The only two times this decade the declines have been steeper was during the 2020 pandemic, when the market plunged as much as 23.6%.

The high-end home market is cooling off after sales rose 80% last year on the back of rising interest rates, rising inflation, a shaky stock market and an uncertain economic outlook. Higher mortgage rates can add thousands of dollars to monthly home bills for the most expensive homes, Redfin said.

mortgage rates climbed again last week after being broadly flat for several weeks, rising in anticipation of Friday’s inflation data, said George Ratiu, chief economist and manager of economic research at Realtor.com.

Redfin said luxury home sales began to cool around this time last year amid a shortage caused by wealthy long-distance workers looking to leave cities and take advantage of low mortgage rates.

“The good news for buyers is that the market is becoming more balanced and competition is decreasing,” said Elena Fleck, a Redfin real estate agent in West Palm Beach, Fla.

Luxury home prices are still rising – albeit not as fast as they were a year ago. The average selling price rose 19.8% year over year to $1.15 million, compared to its peak of 27.5% in spring 2021. Prior to the pandemic, year over year price increases remained stable at less than 10%. Fleck said sellers are now poised to cut asking prices as demand cools and housing shortages ease.

Redfin has been tracking this data since 2012 and qualifies luxury properties as those in the top 5% based on local market value. Non-luxury real estate ranges between the 35th and 65th percentile, depending on market value.

Nassau County, New York, saw a 45% drop in luxury home sales. Metropolitan areas like Oakland, California, West Palm Beach, Florida, Dallas, and Austin, Texas all saw sales decline more than 30%.

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https://whdh.com/news/luxury-home-sales-see-biggest-decline-since-the-start-of-the-pandemic/ Luxury home sales post biggest drop since pandemic began – Boston News, Weather, Sports

Nate Jones

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