There is more unpleasant real estate news from San Francisco – according to Redfin (NASDAQ:RDFN), luxury home prices in San Francisco are falling faster than anywhere else in the nation.
The median sale price of luxury homes in San Francisco plummeted by 12.7% year-over-year to $4.8 million in the second quarter—a new record for this market and the largest decline among the nation’s 50 largest metro areas. One year ago, the market’s median sales price hit a record high at $5.5 million.
San Francisco was not alone in experiencing this pricey tumult. Double-digit annual declines were also recorded in Seattle with a record 12.3% tumble to $2.5 million—the second biggest drop in the country. Two other Bay Area metros also saw steep declines: Oakland (-11.1% to $2.8 million) and San Jose (-10.3% to $4.3 million).
But this West Coast dilemma was not shared elsewhere. Indeed, the median sale price of luxury homes nationwide rose 4.6% year-over-year in the second quarter to a record $1.2 million. By comparison, the median sale price of non-luxury homes climbed 1.5% to a record $340,000. And new listings of luxury homes fell 17.1% year-over-year in the second quarter, versus the 29.8% drop for non-luxury homes.
“High mortgage rates are prompting many middle-income homeowners to stay put, but wealthy homeowners can often afford to move even if it means taking on a higher rate and monthly payment,” said Redfin Chief Economist Daryl Fairweather. “Wealthy buyers are also more likely to pay in cash, meaning they’re less likely to be deterred by elevated mortgage rates. Normally when the housing market is hurting, it’s the luxury market that’s hurting the most by far, but today’s market is unusual because there isn’t a recession. While a lot of high-end homebuyers remain on the sidelines, many of the ones who are in the market are still willing to spend big.”
