The narrative in the mid-Atlantic housing market for the last few months has been more inventory, less demand. However, in the luxury sector, a different story is unfolding.
A new report released Friday by Bright MLS — the online platform where real estate agents can post their listings — revealed that higher-end houses are still experiencing steep price growth and high demand across most of the mid-Atlantic, outperforming the broader market.
The report defines "luxury" as a house priced in the top 5% of the local market, so there’s some regional variation. In the Washington, D.C., metropolitan area, for example, the luxury threshold is $1.8 million. Meanwhile, in Central Pennsylvania, the benchmark is $640,000.
Those properties “sold faster than non-luxury properties” and “sellers continued to receive full asking price or above, which highlights the financial strength of luxury homebuyers,” the report said. It’s evidence that the luxury market has been more resilient as the broader market flounders.
Of course, the luxury market isn’t completely immune to the ills affecting the housing market. Low inventory is still constraining sales in some markets, and overall, higher-end home sales were down compared to the same time last year, according to the report. Even so, “when luxury listings come onto the market, there are generally buyers ready to snap them up.”
Some luxury markets face challenges
Not all markets in the mid-Atlantic are equally resilient, though.
The report revealed that in Washington, D.C., there’s a shift underway in the luxury market as inventory is increasing and it’s taking longer for homes to sell.
“The luxury market in the Washington D.C. region is showing signs of weakening,” according to the report. “The number of new listings surged in the second quarter and sales were down by more than they were in other markets. Like the overall housing market, the Federal workforce cuts are having an impact on the luxury market in the D.C. region.”
Real estate agents in the region said they started feeling the pressure from those workforce cuts toward the beginning of this summer, especially in terms of buyer interest.
“We’ve seen some clawback in terms of showing activity,” Micah Smith, an agent with HRLS Partners at TTR Sotheby’s International Realty, told Homes.com.
Even so, Smith noted that “we’ve been in a housing recession in terms of units for several years now, so it’s going to take a lot more inventory to really put downward pressure on the market.”
