Luxury home prices were up 7.5% in the second quarter of 2017 compared to a year earlier.
A report from Redfin tracked sales in more than 1,000 cities and analyzed the 5% most expensive in each market. It found that prices in the luxury sector were outpacing the rest of the market for the first time since late 2014.
Non-luxury homes hit an average price of $336,000, up 7% year-over-year while the 7.5% rise for luxury homes meant an average $1.79 million.
The report points out that there were fewer luxury homes on the market with a drop of 9.4% in the number of $1m+ homes for sale in Q2 2017 compared to a year earlier. There was a similar fall in the number of homes priced at $5m+.
“The housing shortage is now affecting the top of the housing market,” said Redfin chief economist Nela Richardson. “Yet despite the strong uptick in prices, the luxury market is not nearly as competitive as the rest of the market. Only one in 50 luxury homes sold above list price in the second quarter, compared to more than one in four homes in the bottom 95$.”
The strongest price growth in the luxury market was in Irvine, CA with the average price of a luxury home surged 37.4% to $3.5 million.
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