With the rising home prices, it seems that luxury homes are bouncing back as homebuyers returned to the market in full force in May.
According to realtor.com’s Luxury Housing Report released on Thursday, the luxury market outpaced the rest of the housing market in both price growth and views.
Luxury home sellers returned to the market with new listings of homes priced above $1 million, dropped by 15.1% year over year in May, compared to 57.8% in April. This means that luxury home new listings were still reduced, but to a lesser degree than the month prior. However, like the rest of the market, low inventory is the biggest challenge for these homebuyers.
Chief Economist, Danielle Hale, says the luxury market is leading the recovery. Stay at home and social distancing orders made ‘extra space’ even more relevant. This leads high-end buyers to find a second home that is within driving distance from their primary residence.
Only 25 of the 94 luxury markets tracked by realtor.com showed listing price growth since January. The pandemic has also slowed price growth in the luxury market, which had increased by 15% at the beginning of the year.
Zillow said new listings of higher-end homes dropped by 46%, while the less expensive homes are reduced by 32%. In response to the pandemic, new listings of the most expensive homes were the first to drop below 2019 levels, while cheaper listings fell over a week later.
According to realtor.com, luxury listing price entry points reached $2.97 million in May despite a small pace of growth. This is up 0.5% from April and 6.1% year over year.
As Hale said, it’s the luxury market that led the housing market’s median price growth, which was up 1.6% in May year over year.
After falling 9.5% year over year in April, searches for million-dollar homes grew 7.3% year over year. This topped the 6.2% growth that we saw before the pandemic slowed things down.
Not only are luxury listings seeing more viewers, but popular second-home markets are seeing the love, too.
Full details on housingwire.com