Business
Luxury home values are rising faster than typical homes for the first time in years
Listings for luxury homes are seeing relatively more competition than homes in the market's midrange Luxury home values are up 3.9% year over year. Inventory
About this update from Zillow Group, Inc.
[{"type":"text","content":"Listings for luxury homes are seeing relatively more competition than homes in the market's midrange\nLuxury home values are up 3.9% year over year. Inventory of luxury homes remains 46.9% below pre-pandemic levels, a bigger deficit than in the housing market overall. Richmond has the hottest luxury housing market in the country. Austin is the only major market where luxury home values have declined throughout the past year. SEATTLE, July 31, 2024 /PRNewswire/ -- Luxury home value growth, which has consistently lagged the market's middle tier over the past several years, has now outpaced appreciation on typical homes for five consecutive months, a new Zillow® analysis shows. \n\n \n \n \n \n \n \n\n \nThe typical luxury home nationwide — defined for this analysis as the most valuable 5% of homes in a given region — is worth about $1,620,000. Among the 50 largest U.S. metro areas, the typical luxury home ranges from a low of just under $750,000 in Buffalo to more than $5.3 million in San Jose. \nLuxury home values across the U.S. are 3.9% higher than a year ago. That's faster appreciation than the 3.2% annual growth for the typical U.S. home. For every month from January 2019 — the earliest year-over-year change in Zillow's records — through January 2024, typical home values were outpacing luxury homes on an annual basis. For every month since, luxury home values have been growing faster. \n\"Luxury homes can be challenging to sell because the pool of buyers is so much smaller. That's one reason prices for them usually grow more slowly,\" said Anushna Prakash, economic research scientist at Zillow. \"We're seeing a different trend play out this year. Luxury home buyers are likely less affected by higher mortgage rates than a typical buyer, especially repeat buyers who saw their home equity soar over recent years. Many will be able to pay with cash and skip a mortgage payment altogether.\" \nLuxury home inventory has been slower to recover than inventory overall, helping to keep prices climbing. Inventory in the luxury segment is up 15.7% year over year and is 46.9% below pre-pandemic norms. By comparison, total inventory is 22.7% higher than last year and about 32.6% below pre-pandemic averages.\nThe share of luxury listings with a price cut is climbing, but is tracking below the market as a whole. In June, 20.8% of luxury listin...