Sales of luxury homes slowed in April — but that didn’t stop luxury home prices from rising: According to recent report from Zillow, luxury home market values were higher than April last year in all major metros except Austin, Tampa and Miami.
New listings and pending sales were both down, as luxury buyers and sellers coped with economic uncertainty.
Despite the slowdown, luxury home values increased 2.7% compared with a year ago — double that of the larger housing market.
Zillow defines a luxury home as the top 5% most valuable homes in each region. These homes typically encompass nearly 3,500 square feet of living space and are often situated on more than two-thirds of an acre.
The firm’s data shows that the typical luxury home is now worth about $1.8 million nationwide, and more than double that in six major metros: San Jose, Los Angeles, San Francisco, Miami, San Diego and New York.
“Despite a slower market, home prices have continued to climb — a promising sign for sellers considering listing their properties,” says Orphe Divounguy, senior economist for Zillow, in the report. “Luxury home values, in particular, have remained resilient, even as both buyers and sellers took a more cautious approach after the April stock market volatility.
“The luxury market is often international, so global economic conditions and stability also play a significant role,” Divounguy adds. “As economic conditions begin to stabilize, the luxury housing market could regain some momentum.”
In the report, Zillow finds that from February to March, the number of luxury homes that went under contract went up by more than 30%. But in April – when market volatility went into high gear – that momentum faded as consumer confidence and investment portfolios dipped.
In April, 12% fewer luxury homes went under contract compared to March — a dramatic drop since sales usually pick up in the spring, Zillow says.
By comparison, last April, 10% more luxury homes went under contract from the previous month.
Sellers also pulled back, with new luxury listings down 5% from March and down 3.4% year over year.