Los Angeles celebrities, CEOs and heirs have been scooping up luxury properties at breakneck speed.
Just looking at this week’s headlines, you’ll notice that Rihanna nabbed the Beverly Hills house next door for $10 million, VICE Executive Chairman Shane Smith sold his Pacific Palisades compound for close to $49 million, and The Rock purchased a $28 million Beverly Park estate from fellow actor Paul Reiser.
A new Redfin report sheds some light on what’s going on in LA’s luxury market, noting that sales of high-end homes jumped 39 percent year-over-year in the first quarter of 2021. The “luxury” tier consists of homes in the top five percent of the market when ranked by price, according to Redfin’s methodology.
The median sale price of a luxury home ticked up 3.3 percent annually to $3,150,000. Unlike other price tiers, new luxury listings actually increased by 17.6 percent compared to Q1 2020. Active listings, or total for-sale inventory, rose by 15.1 percent year-over-year. The typical luxury property in Los Angeles spent 78 days on the market, selling 13 days faster than the same period last year.
“With a huge shortage of affordable homes for sale, many non-luxury homeowners are hesitant to put their properties on the market because they’re worried they’ll have trouble finding their next house,” said Redfin Chief Economist Daryl Fairweather. “This isn’t as big of an issue for luxury homeowners since there’s a relative abundance of high-end homes to choose from.”
Nationwide, luxury home sales surged by 41.6 percent year-over-year in the first quarter, outperforming every other price tier. By contrast, affordable home sales ticked up 7 percent, while sales of mid-priced homes grew by 5.9 percent.
Active luxury listings fell 5.1 percent annually in Q1 as new listings climbed by 15.8 percent. The median sale price amounted to $975,000, up 14.7 percent from a year earlier. On average, luxury homes sat on the market for 61 days, down from 99 days during Q1 2020.
The markets that saw the biggest gains in luxury home sales included Miami, FL (101.1 percent), San Jose, CA (92.3 percent), Oakland, CA (82 percent), Sacramento, CA (79.3 percent), and Las Vegas, NV (72.7 percent).
“Luxury properties, even those in the $3 million range, are getting multiple offers and going for well over the asking prices,” said Oakland, CA Redfin real estate agent Katy Polvorosa. “That’s something we haven’t seen before, even though the Bay Area has many affluent residents.”