Redfin Research Center reported Wednesday that sales of homes for $1 million and up increased by 9% in the third quarter, while the total market declined by 1.2% from the same time last year.
The luxury housing market was the first to recover after the financial crisis, and has benefited from a surging stock market, low interest rates and overseas investment.
However, Redfin said, overseas investment is starting to slow with the result that sales of expensive homes in markets that are most dependent on international demand are steadily declining.
At the same time, luxury home sales in cities where those sales rely less on foreign and domestic investors continue to rise.
Redfin examined seven markets with heavy international investment in million-dollar-plus homes: Los Angeles, Orange County and Riverside-San Bernardino in California; Miami, Orlando and Fort Lauderdale in Florida; and Las Vegas.
Luxury home sales in these markets remained strong, but over the past 12 months, year-over-year growth has dropped from 46% to 5%.
With the waning of international investor interest in expensive properties, Redfin said, interest rates are expected to rise, making pricey homes even more costly.
It said supply of million-dollar-plus homes fell by 13% in the third quarter compared with last year. As a result, any post-crisis deals in high-end real estate have all but disappeared.
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