The fourth quarter of 2019 was a strong one for the luxury housing sector, as million-dollar sales and prices rose, according to the realtor.com® Q4 2019 Luxury report released Wednesday.
Million-dollar sales in the quarter rose 11.4% year over year. The luxury entry point reached $1.27 million, up 2.1% annually, realtor.com® reports. The report is based on the last three months of 2019.
The fourth quarter of 2019 was the only period to reach double-digit sales growth for the luxury housing market, and it also followed three quarters of declines for the sector.
But times are changing. Over the past week, Americans throughout the country are being asked to shelter in place as an outbreak of the COVID-19 pandemic spreads in the U.S.
“A low interest rate environment combined with a flourishing economy and record-setting stock markets pushed luxury sales into the double digits for the first time as 2019 came to an end,” says Danielle Hale, realtor.com®’s chief economist. “Buyers jumped at an opportunity to lock in a low rate, while a build-up of luxury inventory gave buyers plenty of options to choose from compared to entry- and mid-level buyers. However, like the U.S. economy, luxury housing isn’t immune to the impacts, both short and long term, of COVID-19. Many of the gains made in the luxury market in the fourth quarter could be erased as buyers are asked to stay home and sellers hunker down. It’s pretty clear that COVID-19 is going to have far-reaching consequences both in the U.S. and globally; the question that remains is just how much of an impact it will have.”
In the fourth quarter of 2019, the volume of luxury home sales rose in 59 of the 78 luxury markets tracked by realtor.com®. The highest increases were reported in Morris, N.J.; Mecklenburg, N.C.; and San Louis Obispo, Calif. All three metros saw sales growth of at least 72% in the fourth quarter.
California luxury markets were notably strong in the fourth quarter, with million-dollar sales growing by 10% year over year. Of the 18 markets tracked in California by realtor.com® researchers, 13 markets saw annual growth in million-dollar sales. Further, California’s luxury market entry point climbed to $1.97 million. Santa Barbara, Calif., was the fastest-growing luxury market in the nation in the fourth quarter. Home prices in the city reached $2.88 million in the fourth quarter, a 25% increase year over year and a 29% rise in sales annually.