Home sales at the high end of the market posted a record slowdown in the three months ending Nov. 30, down 38.1% from a year ago. That outpaces the year-over-year decline in the overall market of 31.4%.
In the D.C. metro area, the slowdown in luxury home sales — those defined as priced in the top 5% of the market — slowed even more. They were down 45% from a year ago.
“It is more severe, simply because real estate is more expensive in Washington, D.C.,” said Daryl Fairweather, chief economist at real estate firm Redfin. “A luxury home in the D.C. area means a $1.6 million or more home. Nationally, it is $1 million or above.”
There is one caveat to the dramatic year-over-year slowdown in luxury home sales. They saw outsized sales growth during the first two years of the pandemic, so they have more room to fall.
“Part of it is that,” Fairweather said. “People saw the higher interest rates coming, and they bought while they were lower, either earlier this year, or in 2021 or 2020.”
Affluent buyers often have a significant share of their wealth tied into the stock market, which has performed poorly in 2022.
Redfin data shows the number of active luxury home listings in the D.C. metro is down 14.7% from a year ago, one of the smaller declines among big cities. New listings for luxury properties was down 17.7% from a year ago at the end of November.
The median price for what is defined as a luxury home — at $1.595 million — is 6.3% more than a year ago.
Beyond sales, the luxury market is likely to see prices ease.
“One of the things that we list is that prices in D.C. are up 6% year-over-year, but they have been declining month-over-month pretty much all summer. So the decline in prices has already begun, Fairweather said.
