Luxury Home Sales Surge Ahead of Affordable Homes Purchases, Redfin Reports
During times like these, one would think that the sales of homes with all the bells and whistles would see a downturn, but that is not the case, according to Redfin. The technology-powered real estate company instead reports that U.S. luxury homes sales grew 60.7% year over year during the three months ending Nov. 30, which marked the largest jump since 2013.
Redfin reports that this nearly quadrupled the growth during the three months that ended on Feb. 29, before the coronavirus had been declared a pandemic. But what also makes this so impressive is that it outpaced the 14.8% increase in mid-priced homes sales and the 6.8% rise in affordable homes sales.
“Americans are pouring money into their homes. Sometimes that means remodeling, and sometimes it means purchasing a luxury beach house in Florida.”
According to Chief Economist Daryl Fairweather, high-earning Americans are taking advantage of stock-market gains, low mortgage rates and the flexibility to work from anywhere. However, “Low- and middle-income Americans aren’t out of the woods when it comes to this recession,” he noted. “Affluent Americans are out of the woods, and they’re at their beach houses sipping margaritas. When times are tough, banks are most likely to dole out home loans to the people who need them the least.”
The company also reported that the 49 most populous metropolitan areas in the United States all experienced double-digit growth in luxury-homes sales during the three months ending Nov. 30. Newark, N.J., experienced the largest spike with luxury homes sales rising 101.6% year over year and sales in West Palm Beach, Fla., rose to 97.1%.
“Americans are pouring money into their homes,” commented Delray Valle, Redfin’s market manager in Palm Beach. “Sometimes that means remodeling, and sometimes it means purchasing a luxury beach house in Florida. We’ve always seen luxury buyers come to West Palm Beach from New York and California, but this year, they’re also coming from Maryland, Las Vegas, Chicago and other midwestern states. Florida is normally a second-home state, but now it’s shifting to a primary-home state.”