The pace of sales for U.S. luxury homes weakened slightly in 2017, with the overall housing market outperforming the still-strong upper tier — according to new data from realtor.com. Despite these signs of a national slowdown, the luxury market remained red-hot in states like Hawaii, Colorado and California, which saw double-digit price gains in several local markets.
The entry-level luxury price – defined as the top 5 percent of transactions based on sales price – rose by 5.1 percent in 2017, compared to a 6.9 percent overall housing market price gain. Luxury properties also took 5.4 percent longer to sell in 2017 than they did in 2016, spending 116 days on market on average.
This slow down is likely attributed to a growing number of luxury homes in the market. In 2017, the number of million dollar listings grew on average by 3.9 percent year-over-year and represented more than 7 percent of all homes listed in 2017.
“Although 2017 was another strong year for the luxury housing market, it was once again outperformed by the U.S. market overall,” said Javier Vivas, director of economic research for realtor.com. “Age of inventory in the top 5 percent of the market slowed significantly over last year — a tell tale sign that the supply in the luxury sector continues to outpace demand. Much of this slowing can be attributed to a wider selection of luxury homes for buyers and increased uncertainty over the last 12 months.”
Entry-level luxury home prices in a dozen counties, including four counties in Hawaii, grew by more than 10 percent in 2017. Prices also rose more than 30 percent in Maui, Hawaii; Eagle, Colo. (near ski resorts Vail, Colo. and Beaver Creek, Colo.); and Brooklyn, N.Y., during that time.
Fastest Growing Luxury Markets
- Primary-Home Luxury Markets: Seattle.; Marin, Calif. (San Francisco Bay Area), and Brooklyn, N.Y., top the list with 12-30 percent growth year-over-year.
- Second-Home Luxury Markets: The Hawaiian Islands of Maui and Kauai; ski towns of Eagle, Colo., and Summit, Utah; and the coastal luxury area of Walton, Fla. dominate the list with 15-33 percent growth year-over-year.
Most Expensive Markets
- Primary Luxury Markets: Manhattan and Brooklyn in New York City, San Francisco Bay Areamarkets of Marin and San Mateo, and Los Angeles continue to top the list. Notably, prices in all markets are also growing faster than the overall national luxury market.
- Second-Home Luxury Markets: Eagle, Colo., Maui and Kauai top the list, with prices in all three markets growing 5-6 times faster than the overall national luxury market.
Realtor.com defines a luxury market as the top 5 percent of all transactions nationally and within a given market based on sales prices from the realtor.com residential home sales database. A total of 74 counties were analyzed as luxury markets with 100 or more $1 million transactions during the January to August 2017 period. All figures reflect yearly averages for that analyzed period.
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