U.S. Luxury Housing Market Saw Prices And Demand Grow In May
Similar to the wider U.S. housing market, which is bouncing back from the early, dampening effects of the coronavirus pandemic, the luxury segment recorded a promising uptick in entry prices, demand and inventory, according to a report by listing website Realtor.com.
Defined as the top 5% of homes listed, the upscale housing sector saw the listing price entry point across the nation grow 6.1% year-over-year to $2.97 million. As more luxury residences hit the market in May compared to April, their higher prices led the overall housing market’s median price gain of 1.6% last month from a year ago, Realtor.com says in its luxury housing report released today.
“The Covid-19 pandemic has reinforced the resilience of the housing market and unlike prior downturns, the luxury market is leading the recovery,” Realtor.com’s Chief Economist Danielle Hale said in a press statement.
Nonetheless, only 25 of the 94 luxury markets Realtor.com tracks have posted increases in their asking prices since January, when the high-end segment finally gathered momentum after a rocky 2019, which was largely deemed as a year of correction in the amounts affluent sellers expected for their abodes.
Luxury home supply continues to lag, while demand spikes
In May, demand for multi-million residences outpaced its pre-pandemic trajectory, even if it experienced a considerable slump in April. Searches for upscale homes spiked 7.3% year-over-year last month, compared to a 9.5% drop in April and a 6.2% growth before the virus outbreak.
As is the overwhelming case in the larger housing industry, the stock of for-sale high-end abodes lagged behind demand. Yet, on a monthly basis, supply did improve considerably. New listings for homes priced above $1 million were down 15.1% year-over-year in May. This contrasts with the 57.8% annual decrease in April. The $1 million and up residences that were on the market took 89 days to find new owners in May or roughly two weeks longer than a year ago.
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