The housing market rout is dragging certain million-dollar homes back to earth. After two years of red-hot growth, the housing market has stalled. Higher rates are hammering the sector. The 30-year fixed interest rate was trending slightly below 7%, according to Mortgage News Daily, which last updated its survey data on Friday. Higher rates add hundreds of dollars in interest for would-be buyers.
As frustrated buyers sit on the sidelines, home sales are falling. And weak demand is also pushing home prices down. Real-estate brokerage Redfin
said that certain million-dollar homes exited the category in January as prices dipped. The share of homes in the U.S. that are worth at least $1 million fell to 7% in January 2023, from an all-time high of 8.6% in June 2022, the company said Monday. In other words, a little over 7% of homes in America — around 6.2 million — are worth more than $1 million in January 2023. And in some parts of the country, they’re falling even more. The report said that the ‘Bay Area, Seattle and New York are losing million-dollar homes fastest.’
Top five and bottom five U.S. metro areas that saw a gain or loss of the share of homes worth $1 million or more
In San Francisco, the share of homes worth a million dollars fell from 86.3% a year ago (January 2022) to just over 80% this past January. Oakland saw a 5.2% drop in million-dollar homes. In Seattle, there was a 3.4% drop in homes worth at least $1 million, and in New York City, a 3% drop. To calculate the value of homes, Redfin used a proprietary model called the ‘Redfin Housing Value Index,’ which includes a Redfin Estimate, public records, and data from the multiple listing service (or MLS) to estimate the current and historical value of homes. They looked at more than 99 million properties in the U.S., including single-family houses, townhomes, condos, and apartments. “Home values are coming down from their peak … but that doesn’t mean buyers are getting a break,” …