The market for high-end homes in Los Angeles is showing some signs of topping out, despite strength in the middle and entry-level housing markets, according to a new report by brokerage Douglas Elliman.
The median price for a “luxury” single-family property — defined as being among the top 10 percent of sales based on price — dropped by 0.3 percent in the second quarter, while the median price for the overall market increased by 5.7 percent for one-family homes, the data show.
The dip is indicative of a slowdown in sales of high-priced homes in areas such as Beverly Hills, where the number of total sales was down 36.5 percent in the second quarter compared to the same period last year. One thing’s for sure: Well-heeled buyers, spoiled for choice, aren’t pulling the trigger as frequently as they were even a year ago.
“In general the market has risen but that rise has slowed somewhat and that slowdown is a little bit more pronounced in the luxury market,” said Colin Keenan, a senior vice president at Elliman, noting that buyers seem concerned about the potential for a dip in the market. “Buyers are worried about being the one left standing during the musical chairs game. There’s no bell that rings when the market has reached its peak.”
Keenan noted that while turmoil in the global economy has likely played into buyer psychology, the numbers do not reflect the impact of Brexit, since Britain did not note to leave the European Union until after the second quarter.
Meanwhile, the median price for a single-family home in the West and Downtown areas of L.A. came in at $1.45 million last quarter, based on 1,572 closed sales. Listing inventory was up 19.1 percent year-over-year, while the number of days a property sat on the market went up from 54 to 57.
Jonathan Miller, an appraiser who prepared the report on Elliman’s behalf, said the trend of the overall market outpacing luxury is echoed across the country.
“Luxury’s been a big part of the real estate market for several years,” he said. “Now, we’re seeing the lower end starting to take over.”