Luxury home sales recently saw a record year-over-year plummet, falling to the second-lowest level ever, according to Redfin.

Sales of homes within the top 5% of estimated market values fell by 44.6% annually during the three months ending Jan. 31, Redfin reported. That’s the largest drop ever posted, per data from the national brokerage that dates back to 2012.

In some ways, the plunge can be attributed to the gains in high-end home sales during the COVID-19 pandemic. Luxury home sales grew faster than non-luxury sales during the pandemic-era housing boom, with the year-over-year sales jump peaking above 80% in mid-2021, so they have further to fall now. But broader economic conditions have also taken a toll as consumers generally purchase fewer expensive goods, including homes, during times of fiscal turbulence or uncertainty. And with mortgage rates remaining high, that can add tens or hundreds of thousands of dollars to the price of a luxury home, making even affluent buyers reticent of committing to a purchase.

Such buyers also may be reluctant to spend big given the tempestuous state of Wall Street, which just had its roughest year since 2008, according to CNBC. The Dow Jones was down 8.8% annually in 2022, while the S&P 500 lost 19.4% and the Nasdaq dove 33.1%.

“Uncertainty is the main factor driving the luxury market slowdown in Los Angeles,” said Alin Glogovicean, a Redfin Premier real estate agent based in Los Angeles. “If you’re investing millions in a property, you want to make sure it will hold its value. Most luxury buyers and sellers are thinking, ‘Let’s just wait and see what happens to the market. When it stabilizes, we’ll be ready to go.’ Everyone is kind of at a standstill.”

Many luxury home hubs saw a big slippage in high-end home sales during the three months ending in January. Miami saw the largest sales dip, with a year-over-year slide of 68.7%. Nassau County-Suffolk County, New York (Long Island) followed with an annual decline of 62.6%, with a trio of affluent California cities — Riverside, Anaheim and San Jose — making up the rest of the top five. These cities posted year-over-year sales decreases of 59.8%, 59.3% and 59%, respectively. Luxury markets in such cities were already among the priciest in the country, and all five saw disproportionate luxury sales growth earlier in the pandemic, so high-end sales are likely normalizing from unsustainable levels, per Redfin.

Despite the pullback in sales, prices of luxury homes are still hovering near their peak. The median sales price of these homes jumped 9% annually, reaching $1.09 million. The all-time high, according to Redfin’s numbers, is $1.1 million, reached in the spring of 2022.

Luxury home prices have been buoyed by low inventory. The number of luxury homes for sale was up 7.1% year over year in the three months ending Jan. 31 — the largest annualized gain since 2015. But while sales activity has dropped, a key reason for the sizable gain is that supply sank to a record low about a year ago.

Still, financing remains easily within reach for buyers still willing to wade into the housing market’s priciest tiers, said Chen Zhao, economics research lead at Redfin.

“The silver lining for the luxury buyers who are still in the market is that competition is sparse and jumbo loans now often have lower mortgage rates than other loan types, in part because there’s less risk that high-end buyers will default on their mortgages,” Zhao said. “Wealthy house hunters are also frequently offered additional rate discounts from their banks as a perk for storing substantial funds there.”