The average sale price for luxury homes nationwide increased 1 percent year-over-year to $1.64 million in the second quarter of 2019, according to a report from Redfin.
The average sale price for luxury homes had declined 1.7 percent decline in the first quarter of this year, Redfin said. In the other 95 percent of the market, home prices increased 3.2 percent year-over year to an average of $322,000.
“Luxury home sales have been relatively soft since early 2018 when the tax code overhaul made it so that people with big mortgages and those living in high-tax states and counties couldn't deduct as much from their annual tax bill,” Redfin Chief Economist Daryl Fairweather said in a release. “But wealthy Americans who would otherwise be considering a multi-million dollar home purchase may now be a bit spooked that the economic expansion they’ve been enjoying for the past decade could soon be nearing its end.”
According to the report, the supply of homes priced at or above $1.5 million increased 18.7 percent in the second quarter, the fifth straight quarter of rising luxury inventory and the biggest increase in two years. Supply of homes priced under $1.5 million increased 2.1 percent annually.
The biggest increase in luxury home prices in the second quarter was in Paradise, Nev., where home prices in the top 5 percent of homes increased 46.8 percent year-over-year. The average luxury home there sold for $1,079 million. In Henderson, Nev., the average luxury home sold for $1.223 million, up 16.4 percent from one year ago.
Redfin said the Florida cities of Fort Lauderdale, St. Petersburg and Tampa also experienced some of the biggest increases in luxury home prices. The biggest decreases in the price of luxury homes were in Seattle, Honolulu and San Jose, Calif., Redfin said.