In Q4 of 2016, luxury home prices reached an average of $1.6 million, a 0.7 percent increase compared to the year before.
Redfin reports that, for the eighth consecutive quarter, luxury home prices have been outpaced by non-luxury properties, which experienced 6.1 percent sales growth to reach an average price of $312,000. A home is considered luxury if it is among the top 5 percent most expensive homes sold during the time period. Non-luxury homes are the remaining 95 percent of the market.
Santa Clarita, Calif., fared well in luxury sales. Prices were up to $2.03 million, a 113.8 percent rise compared to last year. Other thriving high-end markets include Los Angeles, San Francisco, Oakland, and a few places in Florida (West Palm Beach, Tampa, and St. Petersburg).
Luxury prices declined 32.2 percent in Reno, Nev., to an average of $991,000. Prices at the top of the market were also down in Washington D.C., Austin, Texas, Chicago, and San Diego.
“Cities with booming luxury markets attracted traditional high-income buyers seeking a place to live, work and grow their families,” said Redfin chief economist Nela Richardson. “Prices in cities with more transient luxury buyers, looking for investments or a place to park their wealth, had more tepid growth to close out 2016.”