The prices for luxury homes rose 1.4 percent from this time last year, reaching an average of $1.6 million. Price growth, however, is being outpaced by non-luxury homes.
According to Redfin, price growth in the high-end segment has trailed the rest of the market for the last seven quarters. For the third quarter of 2016, non-luxury home growth was 5.0 percent.
The study tracks home sales in more than 1,000 cities across the country. A home if defined as luxury if it was among the top five percent of the most expensive homes sold in the city during a quarter.
“The luxury market improved in the third quarter, but its recovery was incomplete at best. Price growth lags in the more affordable segment of the housing market and sales at the very high end were stuck in neutral,” said Redfin chief economist Nela Richardson. “The super high-end homes are particularly out of sync with the rest of the market and seem to be bending toward a price correction given the tepid sales growth and double-digit pop in inventory at price points over $5 million.”
Three Miami neighbors — Delray Beach, Boca Raton, and Hollywood, Fla. — were among the markets that experienced the highest sales price growth over the last year. Redfin also found 10 super-expensive homes that sold last quarter, including a $37 million modern palace in Palm Beach, Fla.