Dive Brief:
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Wealthy homebuyers are still moving into luxury homes, but they’re paying less for them, according to a CNBC Luxury Real Estate Report compiled by Redfin.
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Sales of $1 million-plus homes increased by 14% in the second quarter compared with the same time frame last year, CNBC reported. But price increases “remained flat,” the reported noted, and the cost of homes selling for more than $5 million fell by 1.2%. That’s the second consecutive year of falling prices on luxury homes.
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Despite an increase in the number of buyers, the inventory of high-priced homes is up. CNBC said 65,000 million-dollar homes are for sale in the U.S., and 4,000 houses worth more than $5 million are on the market — up 8.5% from this time last year.
Dive Insight:
Greece’s economic woes could be convincing luxury homesellers to pare down the pricing, as the number of foreign investors has tapered off. Purchases by investors from China, Western Europe and South America also have fallen, the report said.
Plus, even the wealthy draw the line when home prices get too high, Nela Richardson, Redfin’s chief economist, said. “No matter what the budget is, no one wants to be the person who bought at the top of the market,” she told CNBC.
Price moderation is most pronounced in California’s Bay Area, which is home to some of the country’s most-expensive real estate.
A 15,000-square foot, 10-bedroom mansion in Holmby Hills, for example, sold for $59.4 million in the second quarter — more than any other U.S. home that quarter.
At the same time, the three luxury residences that sold at the deepest discounts also were in the Bay Area. For example, a Belvedere home with an asking price of $28.8 million sold for $10.5 million.
