The luxury housing market began to slow in April as fewer sellers of high-end homes were putting their properties on the market due to financial volatility, according to a report from Zillow.
From February through March, luxury homes were selling at a brisk pace. But in April, 12% fewer homes went under contract than in March. The results were a major surprise because home sales usually increase in the spring. By comparison, in April 2024, 10% more luxury homes went under contract than in the previous month.
New luxury home listings also fell by 5% from March and were down 3.4% year over year, according to Zillow’s report.
A luxury residence is defined as one that is in the top 5% of the most valuable homes in any given region. These homes are typically about 3,500 square feet in size and are often situated on property that is more than two-thirds of an acre.
While Zillow estimates that luxury homes nationwide are worth an average of $1.8 million, the price varies widely depending on the location. Among the 50 largest U.S. metro areas, San Jose, Calif., has the most expensive luxury market, with the typical luxury home costing about $5.9 million. Los Angeles is second at an average value of $5.1 million. The least expensive luxury market is in Buffalo, N.Y., where the average luxury home is valued at $835,000.
The hottest luxury markets in the country, where home values have grown the most in the past year, include Cincinnati, where prices have risen 7.3%. Columbus, Ohio, is next at 6.8%, followed by Chicago at 6.3%. Cleveland and Las Vegas both saw their luxury markets grow by 6.1% over the past year.
The luxury markets where housing values declined during the past year include Austin, Texas, where values dropped 2.1%; Tampa, Fla., which experienced a 1.7% reduction; and Miami, where prices fell 0.5%.
Nationwide, Zillow found that typical luxury homes are valued at about five times the price of a mid-market residence. The largest gap between luxury homes and mid-market homes was found in Miami, where the average luxury home is valued at $4.6 million, 9.4 times higher than the typical mid-market home ($484,341). New York City had the second-largest gap at 5.6 times the value of a mid-market home. Austin was third, with a gap of 5.5 times the value of mid-market homes.
