Median luxury home prices declined 2.3% year over year in the 12 weeks ending June 14, one of the most substantial drops since the beginning of 2015. Over the course of seven days ending June 14, median sale prices for the top 5% of the market rose 3.5% year over year, according to Redfin. This small snapshot and sample size may point to the luxury market’s rebound. The pandemic impacted luxury homes more than the rest of the housing market, but the small price increase may signify a future of rising prices.
This is according to an analysis that divided all U.S. residential properties into five tiers based on Redfin Estimates of the homes’ market values as of mid-June. This report defines “luxury” as all the homes estimated to be in the top 5% based on market value. To represent non-luxury homes, we use the “middle” price tier, i.e. homes estimated to be in the 36th to 65th percentile for value. Redfin typically reports luxury data on a quarterly basis; we are releasing this analysis early because we noticed a reversal in luxury home-sale price growth correlated with the onset of the pandemic.
Luxury price growth reversed course with the impact of the coronavirus pandemic: Price growth for homes in the top 5% had been on the upswing from October 2019 until March. The median luxury price started declining in the 12 weeks ending March 29 and saw its biggest dip (-2.5% YoY) in the 12 weeks ending June 7.