The luxury home market rallied at the end of 2015 after a nine-month slowdown, according to Redfin, the next-generation real estate brokerage. Prices in the luxury market, which Redfin defines as the priciest 5 percent of home sales, grew 3.1 percent in the fourth quarter compared to a year earlier.
Sale prices in the bottom 95 percent of the market grew 5.4 percent over the same period, outpacing luxury price growth for the fourth-straight quarter.
The number of homes for sale priced at $1 million or more fell 6.4 percent from a year prior. A low supply of luxury homes in many cities likely played a role in driving up prices at the top of the market.
While the late-year price increase is welcome news for luxury real estate investors, Redfin chief economist Nela Richardson is hesitant to call it a lasting trend.
“A slowing economy and volatile stock market have many luxury sellers on edge,” Richardson said. “This concern is warranted in large luxury markets such as Houston, Tampa, Chicago and Miami. Instead to shifting into high gear, luxury prices in these markets declined.”
The luxury market fared best in Philadelphia, Austin and Sacramento, where prices were up 25.4 percent, 22.5 percent and 12.6 percent respectively compared to last year.
Baltimore’s luxury market had the largest price drop, falling 17.9 percent, followed by Tampa, Fla., where prices fell 14.7 percent.
Check out Redfin’s website to read the full report, complete with market-by-market data on the biggest luxury market winners and losers.