In the fourth quarter of 2017, stock market gains and investor confidence spurred on strong demand for luxury homes, with prices up 7.4 percent year-over-year to an average of $1.76 million.
Supply on the luxury market has decreased, as the number of homes for sale priced at or above $1 million fell 23.8 percent compared to Q4 2016, as did homes priced at or above $5 million, down 23.4 percent. However, Redfin found that sales are up noticeably, with sales of homes priced at or above $1 million up 15.2 percent and sales of homes priced at or above $5 million were up 13.7 percent from fourth quarter 2016. Luxury homes were typically on the market an average of 75 days, eight fewer days than in the Q4 2016.
“We are seeing sellers and developers become more realistic about pricing, attracting buyers to the negotiating table,” said Aaron Drucker, Redfin’s market manager for South Florida. “Plus, when you add luxury homebuyers’ overall confidence in the economy, a roaring stock market, and passage of tax reform that benefits the ultra wealthy, it’s a recipe for sales.”
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