But the market is seeing some fast sales
The average price of a luxury home in the US was $1.9 million in the second quarter of 2018.
Figures from Redfin show that the year-over-year rise for high-end homes was 5.2%, a slower pace than the first quarter of 2018 when the annual gain was 7.3%.
The analysis tracks home sales in more than 1,000 cities across the nation and is based on the top 5% of homes sold in each city in the quarter.
"Demand for luxury homes in the US has strengthened this year because stock-market gains and tax reform put more money in the pockets of the wealthy," said Sheharyar Bokhari, senior economist at Redfin.
Days on market of luxury homes dropped to an average of 65 days in Q2 2018 compared to 71 days a year earlier, making the fastest on record since Redfin began tracking the metric in 2009.
Luxury homes sold fastest in Oakland, California, where they found buyers in an average of 17 days, followed by San Jose, California (19); San Francisco (29); Seattle (43); and Washington, D.C. (44).
Non-luxury homes outpaced the luxury sector though with an average days on market of 51, down from 61 in Q2 2017.
Inventory remains depleted
Bokhari says that supply of homes is still subdued, even in the multi-million-dollar sector.
“As a result, we are seeing luxury homes sell in record time. The good news is that inventory declined at a slower rate last quarter, which has alleviated some of the upward pressure on prices, resulting in slightly lower price growth in the luxury market last quarter," he said.
Cities across Florida and the Western US saw the nation's largest increases in luxury home prices in the second quarter with the average sale price in the sector in West Palm Beach, Florida, soaring 85% year-over-year to $2.24 million.
Luxury home prices were up 59.1% in Boynton Beach, Florida, 27.7% in Henderson, Nevada, and 27.5% in Seattle.
