Dallas luxury home sales dropped by more than 25 percent in the three months ending in May, as stock market declines, recession concerns and a tight supply of homes for sale depressed high-end sales.
Luxury sales dropped by 28 percent from the same period a year earlier, according to Redfin, which defines luxury home sales as the top 5 percent of the most expensive homes in a respective market. That’s an improvement from April, when Dallas luxury sales dropped by 34 percent, though still almost double the nationwide year-over-year decline of 18.7 percent.
U.S. sales of non-luxury homes, which are much more sensitive to interest-rate increases and higher inflation, fell 5.4 percent during that period.
“Even the upper-end buyers could be pulling back a little because their incomes are more bonus-driven and commission-driven, and they’re more stock market-driven because they have larger assets,” Rodney Anderson, a mortgage lender with Supreme Lending, told the Dallas Morning News. Anderson said that while higher mortgage rates have been most harmful to first time homebuyers, the stock market’s fall in recent weeks has driven buyers’ hesitation at the higher end.
The 34 percent decline in April was the biggest for Dallas since the start of the pandemic, and third-highest in the country, behind Nassau County, NY and Oakland, CA.
New luxury homes may be performing better than the overall market. Harrison Polsky, an agent with Douglas Elliman Real Estate and principal of construction company Catena Homes, told DMN that his new homes inside the Interstate 635 loop are selling while they are still being framed.
Meanwhile, luxury buyers “just want to lock something in,” he said, “they’re not even waiting for a house to be completed.”
Nationwide, luxury-home prices are still surging in many places, according to Redfin’s data, though more slowly than a year ago. Senior Redfin economist Sheharyar Bokhari said he expects price growth to continue to slow throughout the rest of the year and eventually decline. In Dallas, the median price of a luxury home ($1.35 million) has remained flat.
With the slowing sales market, some sellers are lowering their asking prices, Elena Fleck, a Redfin real estate agent in West Palm Beach, FL, told the publication.
“One seller recently called me to let me know they’d be willing to knock $100,000 off their home’s asking price of about $2 million.”
[DMN] — Maddy Sperling