US luxury housing market hits sharpest skid on record: data

Even high-end luxury homes aren’t immune from the US housing market’s ongoing slump, according to the latest data released by real estate firm Redfin this week.

Sales of luxury homes – defined as properties that are estimated to be in the top 5% based on market value – plummeted by a whopping 38.1% in the three-month period ending on Nov. 30 compared to the same time one year ago, according to the firm’s report.

The decline for high-end real estate marked the sharpest on record since Redfin began tracking the market in 2012. By comparison, sales of non-luxury homes – properties that fell in the 35% to 65% percentile of the market by estimated value – declined by 31.4% of the same period.

Long Island’s Nassau County posted the largest decline in ritzy home sales of any market in the country – with the volume of transactions plunging 65.6% compared to last year. Several markets in California, including San Jose and Anaheim, also ranked near the top of the list.

“The luxury market and the overall housing market have lost momentum this year due to many of the same factors: inflation, relatively high interest rates, a sagging stock market and recession fears,” Redfin said in a blog post on the trend.

Redfin cited several factors as responsible for freeze-over in luxury real estate, including a dismal outlook for investment properties as home prices decline, tightened budgets as a recession looms and potential losses in the stock market portfolios of wealthy buyers.

Rising mortgage rates have crimped affordability for all prospective buyers who face the prospect of steeper monthly payments for their new homes.

The average 30-year fixed-rate mortgage hovered at 6.42% as of Thursday, according to Freddie Mac. Rates have roughly doubled in the start of the year as the Federal Reserve hiked interest rates.

However, mortgage rates have fallen slightly since topping 7% during the fall – a trend that could cause a thaw in the market over time.

“With mortgage rates falling, a lot of house hunters see this as their moment to come back and compete,” Seattle Redfin agent Shoshana Godwin said.

As The Post has reported, home prices have already begun to fall in many markets – and housing experts expect the trend to intensify in the year ahead.

Experts at DataTrek and Pantheon Macroeconomics have each predicted home prices could decline by 20% during the ongoing correction.