Photo: Reinhard Link/Flickr
The luxury submarket heated up this summer as demand edged prices higher in most major US housing markets.
Sales were brisk in August, with homes selling at a quicker pace than last year, according to a recent report by Realtor.com.
“The conditions in the luxury segment are quite different from the market overall – it’s really a tale of two markets,” writes Realtor.com Chief Economist Danielle Hale in a statement.
For the August edition of the home index, Realtor.com examined the luxury entry-level price tier — or the top five percent of all residential sales — in 90 markets.
Sales in the luxury submarket rose six percent year-over-year in August, with the average days on market falling from 130 days in August 2017 to 121 days last month. Over 66 percent of the markets analyzed are reportedly seeing inventory sell faster than last year.
The luxury submarket currently has an entry price point of at least $1 million in 50 of the 90 markets analyzed for the report. Some 70 markets recorded year-over-year price gains in August.
August’s luxury sales “broke records” in 20 major metros despite prices posting double-digit annual gains.
“Luxury home prices are moving in the opposite direction of the rest of the market in many places. For the second consecutive month, we’ve seen more markets with double-digit, entry-level luxury price growth than in the past four years,” writes Hale.
Sarasota, FL was the nation’s fastest-growing luxury market in August, with sales prices up 21 percent since June 2017. Queens, NY (15.5 percent) and Santa Clara, CA (14.5 percent) rounded out the top three fastest growing luxury markets.
Every market in the top 10 recorded annual price growth over 12 percent in August.
California was home to four of the top 10 fastest growing markets and seven of the top 20, with many of its markets still showing “plenty of room for growth,” says Realtor.com in the report.
Meanwhile, another Florida market is set to heat up later this year.
Miami, FL could break the $1-million entry price point this fall if recent trends continue. Miami annual price gains have reached their highest level since July 2015. Prices in the luxury submarket are currently growing at just over 2 percent year-over-year.
Similarly, it’s likely that Nashville, TN is about to catch fire, with half of all luxury homes selling in 61 days — placing it firmly in the nation’s top 10 fastest-moving luxury markets.
Click here to read the entire report.