Our Nation’s Capital is Leading the Luxury Market
Take a look at this eye candy, a Palm Beach, Florida compound that ranks as the number one most expensive home sale last quarter at $49 million. Curious what else sold for exorbitant prices? Scroll down for more chances to drool.
$1.65 million - that’s the average price of a luxury home, up 4.2 percent from last year. Redfin, residential real estate company that provides web-based real estate and brokerage services, tracks nationwide home sales in over 1,000 cities. The firm defines a luxury home as one that ranks within the top 5 percent most expensive.
The other 95 percent of the market outperformed the slim luxury market for the ninth consecutive quarter. The average price for a non-luxury home was $307,000 - 7 percent more expensive than last year’s average sales price.
While the bottom 95 percent of non-luxury home buyers face persistently low inventory in many cities around the country, luxury buyers have more options. Sales volume of homes priced over $1 million increased by 1% in 2017 and those over $5 million by 15 percent.
Luxury properties in our nation’s capital have increased in value by nearly a third since last year. Some speculate the Trump administration has brought attention to Washington’s high-end homes. Since President Trump’s inauguration in January, several cabinet members have taken root in some of the most expensive properties in the area. Treasury Secretary Steve Mnuchin purchased a $12.6 million dollar Massachusetts Avenue Heights fortress. His neighbor? Secretary of Commerce, and ultra-wealthy Wilbur Ross, paid nearly $11 million for his Beaux Arts mansion.
“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 her,” said Michael Alderfer, a Washington Redfin agent. “We may see some additional eye-popping purchases from Trump administration officials in the coming months. 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 for the average D.C. homebuyer,” he added.
Runners up St. Petersburg, Florida and Portland, Oregon have seen luxury home prices rocket by around 25% since 2016. Other contenders are Paradise, NV, West Palm Beach, FL, San Francisco, CA and Austin, TX.
Luxury home prices have taken the biggest plunge in Delray Beach, Florida, a coastal city considered part of metropolitan Miami. Inflated average sale prices in early 2016 may be to blame. Palm Beach agent, Delray Valle reports, “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.”
Also affected by declining home prices within the niche luxury home market are Clearwater, Florida at 11.3 percent less than 2016 and Alexandria, Virginia at 9.7 percent less.
Top Three Most Expensive Luxury Home Sales Last Quarter
1. Palm Beach compound (pictured above)
2. Coral Gables, Florida estate for nearly $43 million