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The wealthy are bidding up US mansion prices as stocks surge
[BOSTON] Prices for luxury homes, fueled by the surging stock market and a shrinking inventory of properties on the market, are rising faster than more-modest residences across much of the US.
The average home price in the top 5 per cent of the market jumped to US$1.76 million in the fourth quarter, up 7.4 per cent from a year earlier, according to a report released Thursday by brokerage Redfin Corp. In the bottom 95 per cent of the market, meanwhile, the average rose to US$333,000, an increase of just 6.1 per cent.
"The stock market hit all-time highs with gains in nearly every sector last quarter, instilling confidence among the wealthiest homebuyers," Redfin Chief Economist Nela Richardson said in a statement.
The supply of listings priced at US$1 million or above fell almost 24 per cent from a year earlier, the third consecutive quarter of declining inventory, the brokerage said. Sales of million-dollar homes jumped more than 15 per cent.
Redfin's analysis tracks home sales in more than 1,000 cities across the country, but doesn't include Manhattan. Property purchases in the Hamptons, the Long Island getaway for New York's rich and famous, also is getting a boost from the strong stock market, according to a separate report Thursday from appraiser Miller Samuel Inc and brokerage Douglas Elliman Real Estate.