Despite a growing sense that activity the higher end of the housing market is showing signs of easing, sales of homes priced above $600,000 have increased in 37 of 43 counties surveyed by research firm John Burns Real Estate Consulting, according to a report in The Wall Street Journal.
For the markets surveyed, home sales in that price range rose 10% in the last 12 months but only 5% in the third quarter from the year-ago period, suggesting a slight slowdown throughout the year.
- Still, every price category from $600,000 to $1.5 million-plus reported a sales increase in the third quarter. Growth was strongest (10%) in the $1.1 million to $1.2 million category, followed by the $1 million to $1.1 million set (4%) and the $1.5 million market (1%).
Even as the market shifts to again include new construction targeting entry-level buyers in its scope, high-end construction remains relatively strong.
While sales in the mid-range of luxury homes continue to be robust, sales of ultra-luxury homes are cooling, with Forbes reporting earlier this year that the market for $100 million-plus homes has softened, forcing owners to either slash prices, wait longer to sell or take the properties off the market altogether.
The impact is also being felt acutely in cities like New York as the supply of inventory slows compared to recent years. Toll Brothers said earlier this month that it was shifting focus away from ultra-luxury construction in New York City to meet growing demand in the middle-market, targeting price points between $2,000-$2,500 per square foot on projects of 150 units or less.
Meanwhile, the National Association of Home Builders reported that the number of U.S. home starts priced at $1 million or more fell sharply by 41.6% to 1,762 last year and has been largely on the decline since peaking in 2005. However, the category is accounting for a larger share of new home starts as the residential construction market continues its slow recovery.
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