The Los Angeles housing market posted strong sales gains across all price tiers during the second quarter of 2021, but the number of multi-million dollar transactions in the high-end and luxury segments soared exponentially.
A Redfin report released this week suggests that sales of high-end homes jumped 122 percent over Q2 2020, while luxury home sales increased by 176 percent. The pace of sales is just now beginning to slow in the affordable and mid-priced sectors as rising home prices force some buyers to step to the sidelines.
But for wealthy buyers who have seen their net worths grow during the pandemic, real estate remains an attractive investment. Supply shortages in the upper end of the market have also been less pronounced, contributing to the higher sales figures.
The median sale price in the high-end tier rose 19 percent annually to $1.2 million. The typical high-end home spent 32 days on the market, 11 days less than the same period last year. In the luxury tier, the median sale price climbed 14 percent year-over-year to $3.3 million.
Because high-net-worth individuals comprise a small buyer pool, luxury homes often take several months or sometimes years to sell. Amid the pandemic-driven housing boom, however, the median days on market for luxury homes dropped from 74 days in Q2 2020 to 53 days in Q2 2021.
According to new research by real estate consultancy Knight Frank, Los Angeles recorded 171 sales of super-prime luxury homes — those priced over $10 million — during the first six months of 2021. That’s three times as high as the same period in 2020 and 2019, and a testament to the strength of the LA market during turbulent times.
While other high-priced markets like New York saw many wealthy residents flee to Florida for greater living space and warm weather, Angelenos were more inclined to stay put as the city already offers those lifestyle-enhancing features.
Nationwide, luxury home sales spiked 88.2 percent annually during the second quarter of 2021, Redfin reports. The median luxury home price reached $1,025,000 — 25.8 percent higher than the same period a year ago. During the second quarter, the typical luxury home spent 30 days on the market, a 34-day decline compared to 2020.
The markets that logged the highest number of luxury home purchases included Miami, FL (272.8 percent), Anaheim, CA (205.7 percent), West Palm Beach, FL (186.2 percent), Las Vegas (179.7 percent) and San Francisco (177.7 percent).
Knight Frank expects urban luxury home sales to continue climbing through the rest of the year as vaccine rates improve and international borders reopen.