High-end homes are getting easier to sell, with the luxury market posting some of the largest increases in home sales compared to every other price category, according to the National Association of Realtors.
Sales of homes priced $1 million and above surged 16.2 percent year-over-year in October. On the other hand, overall home sales rose only about 4.7 percent during that time, according to NAR.
Also, inventory levels of higher-priced homes dropped by the largest amounts, falling to a 10.6-month supply. A year ago, supply was at 12.1 months. Inventory of all homes rose from a 4.9-month supply a year ago to a 5.1-month supply in October.
Million-dollar homes are likely selling more due to low interest rates and Americans regaining wealth in the stock market over the last five years. In particular, the market for vacation homes should improve as luxury sales continue to rise, notes Lawrence Yun, NAR's chief economist.
"The improving trends in the upper-end market do not mean Realtors should only chase this market," Yun writes at NAR's Economists' Outlook blog.
"First, the million-dollar-home market makes up only 2.2 percent of total sales. Second, even though this specific market may be improving, it is still not easy. The months' supply ... is 10.6 for $1 million homes. But it is less than 6 months for homes priced under $500,000 and 7 months for homes priced between $500,000 and $1 million."