Luxury Housing Market Off to a Strong Start in 2017

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Luxury Housing Market Off to a Strong Start in 2017

Trump cabinet contributes to surge in luxury home prices in the nation’s capital

Luxury home prices rose 4.2 percent in the first quarter of 2017 compared to last year, to an average of $1.65 million. The Redfin analysis tracks home sales in more than 1,000 cities across the country and defines a home as luxury if it is among the top 5 percent most expensive homes sold in the city in each quarter.

Prices in the bottom 95 percent of the market outperformed the luxury market for the ninth consecutive quarter. The average price for non-luxury homes was $307,000, up 7 percent compared to a year earlier.

While the number of homes for sale remains stubbornly low in many cities around the country, luxury buyers had more to choose from. The supply of homes for sale priced at or above $1 million ticked up 1 percent in the first quarter, compared to a year earlier, while the number of homes priced at or above $5 million jumped 15 percent.

Q1 Market Summary Luxury Market (Top 5%) Rest of Market (Bottom 95%)
Average Sale Price $1.65 million $307,000
Average Sale Price YoY +4.2% +7.0%
Average Sale Price QoQ +2.4% -1.6%
Average Days on Market 91 69
Days on Market YoY 2 more days than last year 6 fewer days than last year
Percent of Homes that Sold Above List Price 1.2% 20.2%

Biggest Winners

The luxury market in Washington, D.C. had a strong start to the year. The average price of a luxury property increased 32.6 percent compared to last year, reversing a year-long trend of declining prices in the luxury segment.  

Could the incoming Trump administration be leading a surge of interest in Washington’s high-end homes? Trump appointees were the purchasers of the two most expensive homes sold in the district in the first quarter. Treasury Secretary Steve Mnuchin shelled out $12.6 million in February for this estate in Massachusetts Avenue Heights, one of Washington’s ritziest enclaves. He’s a literal stone’s throw from the new secretary of commerce, billionaire Wilbur Ross. Ross purchased this Beaux Arts mansion for $10.75 million in late January. Secretary of State Rex Tillerson reportedly bought this stately Colonial in the Kalorama neighborhood for $5.5 million in February. He counts the Obamas and the Trump/Kushner family among his neighbors–though both those families are renting.

“Trump’s cabinet has been billed as the wealthiest in history and they’ve certainly made a mark on the high-end real estate market here,” said Michael Alderfer, a Redfin agent in Washington, D.C. “We don’t typically see many home sales over $10 million in a year. To have two back-to-back is significant. We may see some additional eye-popping purchases from Trump administration officials in the coming months.”

Trump advisor Kellyanne Conway is rumored to be under contract on this $8 million villa.  

“While the new administration is making its mark on the luxury market, large cuts in staff at government agencies or a government shutdown could have a more lasting impact on the housing market for the average D.C. homebuyer,” Alderfer added.

List of Biggest Winners

Luxury Market (Top 5%) Rest of Market (Bottom 95%)
City Average Sale Price YoY Change Average Sale Price YoY Change
Washington, D.C. $2,708,000 32.6% $570,000 6.3%
St. Petersburg, FL $1,227,000 28.5% $212,000 19.1%
Portland, OR $1,339,000 23.5% $422,000 12.2%
Paradise, NV $1,147,000 22.4% $202,000 8.6%
West Palm Beach, FL $1,556,000 21.4% $208,000 13.0%
San Francisco, CA $5,286,000 19.9% $1,270,000 4.6%
Austin, TX $1,747,000 16.2% $368,000 4.8%
Philadelphia, PA $1,010,000 15.3% $189,000 9.9%
Boston, MA $3,540,000 14.1% $675,000 11.8%
Seattle, WA $1,963,000 13.1% $615,000 13.7%

Biggest Losers

The average price for a luxury home fell furthest in Delray Beach, Florida. An unusually high average luxury sale price in the first quarter of 2016 meant prices in the most recent quarter appeared to have fallen steeply by comparison. Redfin agent Delray Valle believes her local market is solid.

“Luxury homes are selling at a normal pace; the average high-end home is on the market about five to six months before finding a buyer. It’s not a super heated market, but there is steady demand for updated, waterfront properties.”

Prices for high-end properties also fell in Clearwater, Florida (-11.3 percent) and Alexandria, Virginia (-9.7 percent).

List of Biggest Losers

Luxury Market (Top 5%) Rest of Market (Bottom 95%)
City Average Sale Price YoY Change Average Sale Price YoY Change
Delray Beach, FL $2,452,000 -26.4% $261,000 11.5%
Clearwater, FL $1,051,000 -11.3% $192,000 7.9%
Alexandria, VA $1,236,000 -9.7% $442,000 1.8%
Alpharetta, GA $1,097,000 -5.2% $370,000 8.5%
Spring, TX $1,080,000 -3.7% $243,000 6.6%
San Diego, CA $2,380,000 -3.6% $578,000 9.5%
Fort Lauderdale, FL $2,646,000 -2.8% $336,000 5.3%
Chicago, IL $1,461,000 -2.4% $296,000 11.3%
Boynton Beach, FL $1,043,000 -2.0% $233,000 6.9%

Most Expensive Sales

Curious about the most expensive homes sold last quarter? Take a peek at the top-10 most expensive sales and live vicariously through these new luxury owners:

  1. This oceanfront Palm Beach, Florida, compound has everything – movie theater, gym, sauna, wine cellar and more. It sold for $49 million.
  2. The Coral Gables, Florida, estate, featuring views of the ocean and Miami skyline, sold for $43.7 million.
  3. Casa Brisas is situated on 300 feet of direct oceanfront in Manalapan, Florida, and features an underground exotic car garage. It sold for $40 million.
  4. Manny Mashouf, the founder of the Bebe retail brand, sold this Bel Air Mediterranean mansion for a cool $30 million.
  5. This $28 million new-construction home is on a prime parcel of land between the Atlantic and the intracoastal waterway in Manalapan, Florida.
  6. The value was in the land in this $26 million Santa Barbara transaction. The sale included three parcels and a house and barn.
  7. This gated Beverly Hills estate steeped in Hollywood history sold for $28.5 million.
  8. Designed by Frank Gehry, this beachfront modern gem in Malibu sold for $24.2 million at auction.
  9. You don’t want to miss the waterslide in this resort-like Miami Beach home that sold for $22.6 million.
  10. Sold for $22 million, this modern, glass Miami Beach home features water and skyline views from every room.

Visit the Redfin Data Center to find more housing market data for metro areas around the country.

Methodology: Redfin tracks the most expensive 5 percent of homes sold in more than 1,000 U.S. cities and compares price changes to the bottom 95 percent of homes in those cities. Analysis is based on multiple-listing and county recorder sales data in markets served by Redfin. To determine luxury market winners and losers, we looked at cities with at least 40 luxury sales in the quarter and an average luxury sale price of $1 million or higher.

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