Boston Luxury Condos – The word on the Street … Luxury home prices hit an all-time high to end the year with the typical U.S. luxury home selling for a record $1.17 million, up 8.8% from 2022, according to a new Redfin report.
The price of luxury homes rose twice as fast as the price of non-luxury homes at the end of last year and a record share of high-end buyers paid cash for those purchases. Non-luxury home prices rose 4.6% year over year for comparison.
Redfin categorizes luxury homes as those projected to fall within the top 5% of their specific metropolitan area in terms of market value. Non-luxury homes are identified as those expected to be within the 35th-65th percentile based on market value.
The notable uptick in prices, accompanied by a surge in new luxury listings and improved sales, signals increased activity among affluent homebuyers and sellers, according to Redfin.
In Boston, luxury home prices rose 2.3%, while new listings grew 9.9%
Additionally, nearly half of the fourth quarter’s luxury home purchases (46.5%) were made in cash, an increase from 2022’s 40% and a new record high, the report also found.
Redfin attributes the accelerated rise in luxury prices, compared to non-luxury prices, to the ability of these buyers to make cash purchases, unhindered by current mortgage rates
“A lot of luxury buyers are coming in with cash, snapping up expensive homes,” said Heather Mahmood-Corley, a Redfin Premier agent in Phoenix. “High-end homes are selling fast, especially in desirable areas like luxurious Scottsdale, or Tempe, which West Coast transplants love because it’s centrally located. One client recently bought a house in Tempe, flipped it, and it sold for $1.4 million in two days.”
Another factor pushing up luxury home prices is inventory, similar to what we’re seeing in the non-luxbury market. Even though there’s been a surge in listings year over year, inventory is still below pre-pandemic levels.
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