The housing market in the United States has seen a shortage for the past two years, but now this shortage is also reaching the demand for luxury homes. We are seeing fewer and fewer listings for multimillion dollar luxury homes, and that is only making the price of these extravagantly costly homes skyrocket. As the availability of luxury homes decreases, the prices of these homes are going up by 4.9 percent, making the average price of a luxury home $1.71 million. In only a year the number of homes priced at over $1 million has fallen by just over 18 percent.
The sales of luxury homes has risen 11 percent over the last year and even ultra-luxury homes priced at over $5 million have seen a sales increase of up to 10 percent. And the demand is still high, which will only mean that over the next few years the supply of luxury houses for sale will continue to fall. The speed at which luxury homes have been selling has also increased. Though they are not selling as quickly as other types of homes, luxury homes sold in an average of 70 days where non-luxury homes sold in an average of 53 days.
The demand for luxury homes can be attributed to a number of factors. For starters, earlier in 2017 the stock market was on the rise and hitting new heights on nearly a daily basis. There has also been a high demand for luxury homes from foreign buyers as well as they tend to favor the luxury market. But even in the case of high end homes, real estate is a local commodity. In cities such as Longmont, Colorado and Fort Lauderdale, Florida, the price of luxury homes increased as much as 34.7 percent. So while the national trend is growing steadily, smaller area within the United States are seeing an even larger shortage of luxury homes.