As in Silicon Valley, U.S. luxury home prices are sluggish

Luxury home prices rose nominally across the U.S. in the fourth quarter of 2016 — by only 0.7 percent, year-over-year, reaching an average of $1.6 million, according to Redfin, the real estate brokerage.

Redfin defines a luxury property as one that is in the top 5 percent of the most expensive homes sold in a market.  According to the brokerage, this was the eighth consecutive quarter in which non-luxury properties exceeded luxury homes in price appreciation nationwide. An average non-luxury home sold for $312,000, up 6.1 percent from a year earlier.

“The Trump rally in the stock market did little to move prices in luxury real estate,” said Nela Richardson, Redfin’s chief economist. “Cities with booming luxury markets attracted traditional high-income buyers seeking a place to live, work and grow their families. Prices in cities with more transient luxury buyers, looking for investments or a place to park their wealth, had more tepid growth to close out 2016.”

Santa Clarita, California, outside Los Angeles, showed the highest luxury price hikes among the more than 1,000 cities surveyed — up a whopping 113.8 percent in the fourth quarter, year-over-year,  to an average of $2.0 million. San Francisco luxury homes showed the fourth highest gains in the country, up 24.4 percent to $5,816,000.

Read the report here.

Last week, Coldwell Banker issued a report showing that Silicon Valley’s luxury home market took a hit in December, with both sales and prices down from a year earlier. Sales tumbled 25.6 percent in Santa Clara County, while the median price for luxury properties dropped 6.5 percent, from $2,597,500 to $2,438,000. Coldwell Banker defines a luxury home in Silicon Valley as one that sells for at least $2 million — an entry-level price, really, in some communities on the Peninsula.

In the East Bay, the luxury market was more robust, with sales and prices increasing year-over-year in December. (The brokerage defines a luxury home in Alameda and Contra Costa counties as one that sells for $1.5 million.) Sales jumped 5.7 percent year-over year, while the median price for luxury homes rose by about 3 percent, from $1,845,000 to $1,900,000.

Photo: A house in Lafayette. (Courtesy of Redfin)

 

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