It’s been a rough few months for luxury real estate.
In the three months ending November 30, high-end US sales dropped at a record rate, Bloomberg reported on Wednesday. Overall, sales fell 38 percent year over year, according to data from the real-estate brokerage Redfin—the biggest decline ever seen in data that goes all the way back to 2012. To get to these numbers, the company looked at the top five percent of listings in America’s 50 most populous metro areas.
While that stat alone is worrying, some areas experienced even worse declines. Long Island’s Nassau County led the pack in a particularly bad performance, with luxe home sales falling almost 66 percent. San Diego was a close runner-up, with a 60 percent drop, and San Jose wasn’t far behind, with an almost 59 percent decrease. Rounding out the top five worst locations for luxury-home sales were Riverside and Anaheim, where sales fell about 55 percent in both cities.
These numbers are indicative of a larger trend across the country, thanks to a wonky stock market and higher mortgage costs. All over the United States, home prices are falling as buyers wait to see how the economy will fare. And the luxury market in particular has been hit hard: Many wealthy buyers invest in property, but the outlook for home values isn’t too hot, according to Redfin. Plus, these consumers typically have a lot of money in the stock market, which is currently on track to have its worst year since 2008.
It’s a big pivot from the robust housing market the US saw during most of the pandemic, when people were looking for more space and had the money saved up to buy it. And the change of course comes alongside reports of homes being pulled off the market at record rates, thanks to low demand from buyers.
Yet, there’s still some reason to be hopeful heading into the new year. Mortgage applications and requests for tours have been on the rise, according to Redfin’s data, which means that we could see increased demand in 2023.
Luxury homeowners looking to sell are certainly happy to hear that news.