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Redfin Report: Luxury Home Prices Inched Up 0.7 Percent in Fourth Quarter as the Rest of the Market Showed Substantial Gains

January 26 2017

SEATTLE--Luxury home prices rose 0.7 percent in the fourth quarter of 2016 compared to 2015, to an average of $1.6 million, according to Redfin, the next-generation real estate brokerage.

Redfin's analysis tracks home sales in more than 1,000 cities across the country and defines a home as luxury if it is among the top 5 percent most expensive homes sold in the city in each quarter. The bottom 95 percent of the market performed far better than the luxury market in the fourth quarter. This marks the eighth consecutive quarter where non-luxury properties outperformed their luxury counterparts in price growth. An average non-luxury home sold for $312,000, up 6.1 percent compared to a year earlier, the largest such gain since the first quarter of 2014.

"The Trump rally in the stock market did little to move prices in luxury real estate," said Redfin chief economist Nela Richardson. "Cities with booming luxury markets attracted traditional high-income buyers seeking a place to live, work and grow their families. Prices in cities with more transient luxury buyers, looking for investments or a place to park their wealth, had more tepid growth to close out 2016."

After four straight quarters of a Florida city leading the pack, Santa Clarita, California, a suburb of Los Angeles, was the biggest winner in terms of luxury price gains among all cities surveyed, up 113.8 percent in the fourth quarter compared to a year earlier, to an average of $2.0 million.

When looking at which cities had the largest gap between the price of a luxury home and the price of an average home, Florida came out on top, with seven of the top 10 most unequal cities located in the state. The most unequal city, Fort Lauderdale, had an average luxury home sell for 8.3 times that of a home in the bottom 95 percent of the market there.

Taking the prize as the most expensive sale in the final quarter of 2016 was this Paul McLean-designed masterpiece in Los Angeles, with city and ocean views. It sold for $39.0 million on December 16, 2016.

To read the full report, complete with city-specific data and charts, as well as a listing of the top-10 most expensive individual sales, please click here.

About Redfin Corporation

Redfin is the next-generation real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer's favor. Founded by software engineers, Redfin has the country's #1 brokerage website and offers a host of online tools to consumers, including the Redfin Estimate, the highly accurate automated home-value estimate. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 80 major metro areas across the U.S. The company has closed more than $31 billion in home sales and saved customers more than $335 million in fees through 2015.