SEATTLE, WA — The luxury housing market showed signs of cooling in April, as financial volatility prompted both buyers and sellers to adopt a more cautious stance. Zillow’s latest report reveals notable declines in new listings and pending sales, even as luxury home values remain higher year-over-year in most major U.S. markets.
“Despite a slower market, home prices have continued to climb — a promising sign for sellers considering listing their properties. Luxury home values, in particular, have remained resilient, even as both buyers and sellers took a more cautious approach after the April stock market volatility,” said Zillow Senior Economist Orphe Divounguy.
Currently, the typical luxury home in the U.S. is valued at approximately $1.8 million, offering nearly 3,500 square feet of living space and set on more than two-thirds of an acre. While pending sales for luxury homes dropped by 12% in April compared to March, values still rose 2.7% over the past year, outpacing the 1.4% increase seen in the broader housing market.
Economic uncertainty and high borrowing costs have kept many buyers on the sidelines. However, the limited supply of high-end homes and their desirable features have helped sustain their value. Early in the season, the luxury market saw a burst of activity with a 30% spike in contracts from February to March, but momentum faded in April as economic conditions added friction to the market.
Regional trends further highlight the uneven dynamics. Luxury values are highest in California metros such as San Jose ($5.9 million), Los Angeles ($5.1 million), and San Francisco ($4.8 million). At the other end of the spectrum, Buffalo’s luxury market averages just over $835,000. Hot metro areas for price growth over the last year included Cincinnati (7.3%), Columbus (6.8%), and Chicago (6.3%), while markets like Austin (-2.1%), Tampa (-1.7%), and Miami (-0.5%) saw declines.
Ultimately, the luxury housing market’s trajectory remains intertwined with broader economic conditions. According to Divounguy, “The luxury market is often international, so global economic conditions and stability also play a significant role. As economic conditions begin to stabilize, the luxury housing market could regain some momentum.”
For now, the market’s resilience in home values continues to offer a silver lining amid broader uncertainty.
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