America’s long-running property party has come to a screeching halt.
Luxury home sales fell a record 28% in the three months to August 31, compared to the same period last year, according to a new Redfin report.
Amid exploding interest rates and growing economic uncertainty, affluent buyers are now turning away from the most expensive homes in droves, figures show.
“High-end home hunters are shocked when they see the impact of rising mortgage rates on paper,” said Redfin chief economist Daryl Fairweather.
“For a luxury buyer, a higher interest rate can equate to a monthly housing bill that costs thousands of dollars more,”
Redfin defines luxury homes as being in the top 5% by asking price.
“Luxury goods are often the first to be cut when uncertain times force people to re-examine their finances,” Fairweather said.
The 28% freefall was by far the steepest drop on record since Redfin began analyzing the metric in 2012.
The previous mark was 23%, set at the start of the pandemic in 2020 as lockdowns set in and the property market seized up.
Sales of non-luxury homes also saw an unprecedented drop of 19.5% over the same period, according to the report.
Expensive cities in California saw the steepest declines in luxury sales, with Oakland recording a staggering 63.9% drop and San Jose a 59.6% drop.
Miami, which has seen stratospheric price increases in recent years, saw the third largest drop in luxury sales at 55%
New York saw a much more modest decline in the category at 11.8%.
While its transfers have slowed significantly, Florida still saw massive increases in median home sale prices in the three months ending Aug. 31.
The Sunshine State had six of the top ten cities with the largest increases.
Tampa Bay was in the top spot, with median home prices for the three months ending Aug. 31 up 39.3% from the same time last year.
Median sales in New York remained largely flat, growing 4% over this period.