U.S. luxury sales came roaring back in September from a slump earlier in the year, as mortgage rates hit an annual low, according to the latest data from realtor.com.
The number of $1 million-plus home sales across 79 major U.S. luxury markets turned positive in September, rising a significant 5.7% compared to the same month last year, according to raw data analyzed by Mansion Global. The month marked a major turnaround for the U.S. luxury market, where soaring house prices, particularly in coastal cities, and other economic uncertainties caused big-ticket home sales to fall short of 2018 levels.
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The rise in sales corresponded with a decline in the cost of 30-year-fixed mortgage rates to a near-historic low of 3.6%, according to data from Freddie Mac. A home loan hadn’t been that inexpensive since the spring of 2016, historical data shows.
Meanwhile, luxury home price growth was more muted than sales, as the average entry-level luxury price across those 79 markets rose only 2% year-over-year to $1.212 million, according to data from realtor.com, which defines luxury prices as the top 5% of sales in each market.
Home prices in sunny, oceanfront Santa Barbara, California, led the country with the entry-level price rising over 30% in September compared to a year ago.
On the other coast, Cape May, New Jersey, which has seen a sudden rise this year in prices and luxury sales, came in as the second top performer, with the entry-level luxury price rising to 18% year-over-year to $1.6 million, the data showed.
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Pinellas County, Florida, which includes the popular Gulf Coast cities of Clearwater and St. Petersburg, continued to see remarkable price growth, fueled by a steady migration of baby boomers, Mansion Global has previously reported. Home prices in the county rose just shy of 15% in September compared to last year.
Pinellas is the latest Florida county to experience a surge in home prices on the back of strong migration to the state, but researchers at realtor.com said it could be unsustainable.
“The question will be how long this market can sustain its force, as we saw similar trajectories in Sarasota and Collier counties, which experienced astonishing price growth throughout 2018 only to lose steam and are now experiencing declining prices,” according to commentary from the site about the outlook for 2020.
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In fact, Sarasota, Florida, topped the list for the steepest decline in luxury home prices in September. The average entry-level luxury price there fell to $854,191 in September, a 13% drop from last year.
It was followed by Marin, California, just north of San Francisco, where the luxury threshold fell nearly 10% to a little over $3 million, according to the data.
(Mansion Global is owned by Dow Jones. Both Dow Jones and realtor.com are owned by News Corp.)
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December 25, 2019 at 01:10AM
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U.S. $1-Million-Plus Sales Rebounded in September - Mansion Global
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