Searches for homes priced over $1 million hit a record high in January of 10.8 percent of all saved searches on Redfin.com, the brokerage said in a report published Wednesday. That figure is up from 8.5 percent of all searches saved the year prior and the highest share its reached since Redfin began tracking the data at the beginning of 2017.
Meanwhile, searches for homes priced below $500,000 declined by about the same amount, amounting to 36 percent of all home searches in January down from 39.3 percent the year before, a low not seen since September 2017.
Homebuyers may be more encouraged to consider pricier homes now with interest rates remaining low and with nationwide home prices continuing to rise. But those less impacted by the economic effects of the pandemic are those in upper economic tiers who are most likely to afford $1 million real estate assets.
“Wealthy people are reaping the benefits of unequal recovery from the pandemic-driven recession as they earn money from robust stock portfolios and rising real estate values,” Redfin Chief Economist Daryl Fairweather said in the report. “Not only can they afford to move, they also have big budgets. Unfortunately, many lower-income people, particularly those in the service industry, are struggling financially and aren’t in the market for homes.”
In the three months ending Nov. 30, U.S. luxury home sales soared 61 percent, the brokerage noted — the largest jump seen in these sales since 2013.
Not surprisingly, metros in California topped the list of places where homebuyers were most likely to search for $1 million-plus homes. Nearly half of home searches conducted in San Jose during January were filtered for houses priced over $1 million, the greatest share of $1 million home searches saved across all metros analyzed. Following San Jose, San Francisco (48 percent of saved searches), Oakland (31.8 percent), Anaheim (25.1 percent) and Los Angeles (24.9 percent) had the next highest shares of $1 million home searches.
Those markets are among the most expensive in the country: The median home sale price in San Francisco is $1.4 million, it’s $1.2 million in San Jose, $817,000 in Oakland, $800,000 in Anaheim and $730,000 in Los Angeles.
There are only seven other metros across the U.S. where the median home sale price is above $500,000: Boston, Massachusetts; Nassau County, New York; New York, New York; Oxnard, California; San Diego, California; Seattle, Washington; and Honolulu, Hawaii. All of these metros but Honolulu also saw record-high shares of searches for homes over $1 million during January.
$1 million-plus homes also aren’t impenetrable to the fast pace of the market like they may have been in the past.
“Expensive homes are more popular than they used to be, too,” Seattle Redfin Agent Bliss Ong said in the report. “In the past, anything over $1.5 million would stay on the market for several weeks, but that’s not the case anymore. Even in the $2 million range, homes are selling within the first week.”
In January, Zillow reported that the number of so-called “million-dollar cities” had surged 17 percent year over year, the biggest net gain in such cities in a decade.