11% of Redfin.com Searches Were For $1 Million-Plus Homes in January, Up From 8.5% a Year Earlier

Rhea-AI Summary

In January, 10.8% of home searches on Redfin.com were for homes priced over $1 million, a significant increase from 8.5% a year ago and the highest since tracking began in 2017. Conversely, searches for homes under $500,000 dipped to 36%, the lowest since September 2017. Factors driving this trend include low mortgage rates and a 13% rise in the national median home-sale price. Luxury home sales surged 61% in late 2020, primarily benefiting affluent buyers while lower-income individuals face financial challenges.

Positive

• 10.8% of searches for homes over $1 million is the highest since 2017.
• Luxury home sales increased by 61% in the three months ending November 2020.

Negative

• 36% of searches for homes under $500,000 is the lowest since September 2017.
• Lower-income buyers are struggling financially, limiting their market participation.

SEATTLE, Feb. 10, 2021 /PRNewswire/ -- (NASDAQ: RDFN) — Nationwide, 10.8% of saved searches on Redfin.com filtered exclusively for homes priced over $1 million in January, according to a new report from Redfin (www.redfin.com), the technology-powered real estate brokerage. That's up from 8.5% a year earlier and the highest share since Redfin started tracking this data in the beginning of 2017.

At the same time, 36% of home searches in January filtered exclusively for homes priced under $500,000, down from 39.3% a year earlier and the lowest share since September 2017.

Low mortgage rates and quickly rising home values—the national median home-sale price rose 13% year over year in December—are two reasons why a record share of homebuyers are looking for homes priced over $1 million. The trend is also partly due to the fact that in today's economic climate, affluent Americans are the ones who can afford to buy homes.

"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," said Redfin chief economist Daryl Fairweather. "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."

Luxury home sales in the U.S. soared 61% in the three months ending November 30, the biggest jump since at least 2013 and a much bigger increase than sales of mid-priced or affordable homes.

California Redfin.com users most likely to search for $1 million-plus homes

In San Jose, 48.5% of searches filtered for homes priced over $1 million in January, the highest share of the metros tracked by Redfin. It's followed by four other expensive California metros: San Francisco (48%), Oakland (31.8%), Anaheim (25.1%) and Los Angeles (24.9%). That's the highest share since at least the beginning of 2017 in all five of those metros.

Those areas are home to the five most expensive housing markets in the U.S. The median home-sale price is $1.4 million in San Francisco, $1.2 million in San Jose, $817,000 in Oakland, $800,000 in Anaheim and $730,000 in Los Angeles.

The median home-sale price is above $500,000 in seven other metros. Six of those seven areas saw record-high shares of searches for homes over $1 million in January: Boston (15.5%), Nassau County, NY (9.7%), New York, NY (12.6%), Oxnard, CA (16.2%), San Diego, CA (20.2%) and Seattle (17.8%). The exception is Honolulu, where 16.8% of searches filtered for homes priced over $1 million, the second-highest share in the last four years (the highest share was 17.9% in September).

"With home prices up from last year and escalating even higher with bidding wars, a lot of buyers have no choice but to up their budgets," said Seattle Redfin agent Bliss Ong. "A home that would have cost $699,000 a year ago would be listed for $750,000 today and it may end up selling for $850,000. Expensive homes are more popular than they used to be, too. 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."

To read the full report, including the full breakout of metro-level data, please visit: https://www.redfin.com/news/million-dollar-home-searches-increase.

About Redfin
Redfin (www.redfin.com) is a technology-powered residential real estate company, redefining real estate in the consumer's favor in a commission-driven industry. We do this by integrating every step of the home buying and selling process and pairing our own agents with our own technology, creating a service that is faster, better and costs less. We offer brokerage, iBuying, mortgage, and title services, and we also run the country's #1 nationwide brokerage website, offering a host of online tools to consumers, including the Redfin Estimate. We represent people buying and selling homes in over 90 markets in the United States and Canada. Since our launch in 2006, we have saved our customers over $800 million and we've helped them buy or sell more than 235,000 homes worth more than $115 billion.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

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SOURCE Redfin

FAQ

What percentage of searches on Redfin.com were for homes over $1 million in January 2021?

In January 2021, 10.8% of searches on Redfin.com were for homes priced over $1 million.

How much did luxury home sales increase in late 2020?

Luxury home sales in the U.S. increased by 61% in the three months ending November 30, 2020.

What was the trend for home searches under $500,000 in January 2021?

Searches for homes priced under $500,000 fell to 36%, the lowest share since September 2017.

What are the main factors driving the increase in searches for million-dollar homes?

The increase is driven by low mortgage rates and a 13% rise in the national median home-sale price.

Which cities showed the highest demand for homes over $1 million?

San Jose, San Francisco, Oakland, Anaheim, and Los Angeles showed the highest demand for homes over $1 million.