Redfin Finds Luxury Home Prices Keep Climbing Despite Sluggish Demand

(Illustration courtesy of Mikail McVerry via Unsplash)

The median luxury home sale price in the U.S. rose 4.6% year over year to $1.31 million in December, according to a new report from Redfin, Seattle.

By comparison, non-luxury prices rose 1.4% to $375,000–the slowest growth since 2013, the report noted.

Luxury home prices fell in just two metros: Fort Worth, Texas and Portland, Ore.

Luxury home prices are rising not because demand is high, but because affluent buyers are competing over the few homes on the market that everyone wants, said Alin Glogovicean, a Redfin real estate agent in Los Angeles.

“Homebuyers are very selective because prices and mortgage rates are high–they want a house that has everything. Even super-wealthy buyers are hesitant to pull the trigger because there’s not a lot of great inventory and they don’t want to settle,” Glogovicean said. “We’re seeing bidding wars on the few homes that are desirable, which is driving up prices. If you list your house for $2.9 million and it’s in really good shape and in a desirable location, you might sell it for $3.3 million and get a buyer who pays cash and waives contingencies.”

The report noted that pending sales of luxury homes fell 1.1% year over year in December, the biggest decline in six months. For comparison, pending sales of non-luxury homes fell 0.6%, the largest decline in eight months.

A more backward-looking metric, closed sales of luxury homes, rose 0.4% year over year, compared to a 0.7% decrease for non-luxury homes. Redfin noted active listings of luxury homes for sale increased 5.6% year over year in December, the slowest growth since April.

Non-luxury listings rose even faster–7%–though that was the slowest growth since February 2024. “Supply growth is likely slowing because homebuyer demand is sluggish,” the report said.