Luxury home prices rose 4.2 percent in the first quarter of 2017 compared to last year, to an average of $1.65 million. The Redfin analysis tracks home sales in more than 1,000 cities across the country and defines a home as luxury if it is among the top 5 percent most expensive homes sold in the city in each quarter.
Prices in the bottom 95 percent of the market outperformed the luxury market for the ninth consecutive quarter. The average price for non-luxury homes was $307,000, up 7 percent compared to a year earlier.
While the number of homes for sale remains stubbornly low in many cities around the country, luxury buyers had more to choose from. The supply of homes for sale priced at or above $1 million ticked up 1 percent in the first quarter, compared to a year earlier, while the number of homes priced at or above $5 million jumped 15 percent.
The luxury market in Washington, D.C. had a strong start to the year. The average price of a luxury property increased 32.6 percent compared to last year, reversing a year-long trend of declining prices in the luxury segment.
Could the incoming Trump administration be leading a surge of interest in Washington’s high-end homes? Trump appointees were the purchasers of the two most expensive homes sold in the district in the first quarter. Treasury Secretary Steve Mnuchin shelled out $12.6 million in February for this estate in Massachusetts Avenue Heights, one of Washington’s ritziest enclaves. He’s a literal stone’s throw from the new secretary of commerce, billionaire Wilbur Ross. Ross purchased this Beaux Arts mansion for $10.75 million in late January. Secretary of State Rex Tillerson reportedly bought this stately Colonial in the Kalorama neighborhood for $5.5 million in February. He counts the Obamas and the Trump/Kushner family among his neighbors–though both those families are renting.
“Trump’s cabinet has been billed as the wealthiest in history and they’ve certainly made a mark on the high-end real estate market here,” said Michael Alderfer, a Redfin agent in Washington, D.C. “We don’t typically see many home sales over $10 million in a year. To have two back-to-back is significant. We may see some additional eye-popping purchases from Trump administration officials in the coming months.”
Trump advisor Kellyanne Conway is rumored to be under contract on this $8 million villa.
“While the new administration is making its mark on the luxury market, large cuts in staff at government agencies or a government shutdown could have a more lasting impact on the housing market for the average D.C. homebuyer,” Alderfer added.
The average price for a luxury home fell furthest in Delray Beach, Florida. An unusually high average luxury sale price in the first quarter of 2016 meant prices in the most recent quarter appeared to have fallen steeply by comparison. Redfin agent Delray Valle believes her local market is solid.
“Luxury homes are selling at a normal pace; the average high-end home is on the market about five to six months before finding a buyer. It’s not a super heated market, but there is steady demand for updated, waterfront properties.”
Prices for high-end properties also fell in Clearwater, Florida (-11.3 percent) and Alexandria, Virginia (-9.7 percent).
Curious about the most expensive homes sold last quarter? Take a peek at the top-10 most expensive sales and live vicariously through these new luxury owners:
Visit the Redfin Data Center to find more housing market data for metro areas around the country.
Methodology: Redfin tracks the most expensive 5 percent of homes sold in more than 1,000 U.S. cities and compares price changes to the bottom 95 percent of homes in those cities. Analysis is based on multiple-listing and county recorder sales data in markets served by Redfin. To determine luxury market winners and losers, we looked at cities with at least 40 luxury sales in the quarter and an average luxury sale price of $1 million or higher.
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