Luxury housing market delayed in April, reports Zillow
Despite a delay in market activity, prices continue to rise, with luxury home values that rise by 2.7% year after year – almost double the growth of 1.4% in the wider housing market.
“Despite a slower market, house prices have continued to rise – a promising sign for sellers considering listing their properties,” said Orphe Divounguy, senior economist at Zillow, in a statement.
“Luxury home values in particular have remained resilient, even when both buyers and sellers have chosen a more cautious approach after the volatility of the stock market of April.”
The momentum of March does not last
The delay follows a short increase in March. Luxury houses that go under contract rose more than 30% from February to March, but the activity fell sharply in April.
Contracts fell by 12% month after month – a reversal of the typical spring trend. In April 2024, contracts by 10% increased from March.
New offers also fell this year – with 5% decrease from March and 3.4% compared to April 2024.
“Worldwide economic conditions and stability also play an important role,” said Divounguy. “As the economic conditions begin to stabilize, the luxury housing market can regain some momentum.”
Although luxury buyers often have more liquidity and equity than in the broader market, high mortgage interest rate, increased house prices and general economic uncertainty weigh on their decisions, Zillow said.
Nevertheless, limited inventory and the desirability of high-quality properties that often offer almost 3,500 square feet of space and keeping on large parties in many markets.
Regional price deviations
Luxury prices vary greatly throughout the country.
Of the 50 largest metro areas, the most expensive luxury markets in California are. San Jose is at the top of the list of typical luxury houses with a value of almost $ 6 million, followed by Los Angeles ($ 5.1 million) and San Francisco ($ 4.8 million).
At the bottom, Buffalo, New York, placed the lowest typical luxury value on just over $ 835,000.
Different Midwestern cities led in luxury price growth. Annual profit was the strongest in Cincinnati (+7.3%); Columbus, Ohio (+6.8%); Chicago (+6.3%); Cleveland (+6.1%) and Las Vegas (+6.1%).
In the meantime, luxury housing values in Austin (-2.1%), tampa (-1.7%) and Miami (-0.5%) fell.
Luxury houses in Ohio also sold the fastest. In Cincinnati and Columbus these houses usually went under contract within five days.
Nationally, the typical luxury house is worth about five times the value of a mid-market-house-very-ranging of a 5.5-to-1 ratio in 2020, which suggests that a modest narrowing of the price gap.
