Sales of Million-Dollar Homes Double in a Year
October 26, 2020
Home sales are rapidly increasing during the pandemic, but the most dramatic spike is occurring at the top of the market. Sales of homes costing $1 million or more have more than doubled since last year. “I don’t ever recall home sales doubling in a 12-month time span,” Lawrence Yun, chief economist for the National Association of REALTORS®, told NPR. This is “very unusual.”
Home sales in luxury vacation hotspots have accelerated since July—up 34% year over year in September, NAR reports. “The uncertainty about when the pandemic will end, coupled with the ability to work from home, appears to have boosted sales in summer resort regions, including Lake Tahoe, the Mid-Atlantic beaches, and the Jersey Shore areas,” Yun said last week in reporting the latest existing-home sales.
Housing analysts say the real estate market is revealing a tale of two markets: the haves and have-nots. For those still holding onto their jobs in the pandemic, they may have never felt richer. On the other hand, those who may have lost their jobs are struggling to make rent or mortgage payments.
As the pandemic causes work and school to merge under one roof, those feeling financially secure are more compelled to look for a home with greater square footage. Mortgage rates are at record lows, which could make trading up more cost-effective.
Home prices are climbing across the board as buyer demand remains high and inventories low. Sales for homes priced $250,000 to $500,000 increased 36% last month, NAR reports. The median home price in September reached a record high of $312,000—up 14.8% from a year ago.
Updated: November 23, 2020