Prices in the luxury housing market – the top 5% of homes sold in a given quarter – dropped about 1.1% year-over-year in the first quarter of 2016. The luxury market saw weakening price growth throughout last year, but this is the first time since 2012 that prices have actually dropped, according to HousingWire.
Meanwhile, homes in the bottom 95% of the price spectrum kept gaining, with prices increasing by 4.7% annually, HousingWire reported.
“Luxury buyers are out of step with the rest of the market because their wealth is at stake,” said Redfin chief economist Nela Richardson. “Instead of cheering rock-bottom mortgage rates, luxury buyers recoiled from high-end spending in the face of volatile asset prices. Luxury demand, especially for vacation and investment properties, has been more fragile this year, causing prices to slump.”
Some city saw luxury prices take a bigger hit than others. Luxury homes in Miami Beach saw an average annual drop of 13.7%, while both Austin and Boston saw decreases of 11.7%, according to HousingWire.
Luxury home prices have dropped for the first time since 2012, according to new data from Redfin.