This is a very deceiving chart. We know that prices have risen over the last 3 years, and we know that the luxury market has grown during that time as well. So why hasn’t the median price increased?
It’s because of these two reasons that the median price hasn’t changed.
Rising Prices: Yes, a 20% increase means that $2,000,000 house is now worth $2,400,000. And that $1,500,000 home would be priced at $1,800,000. And of course, the $1,000,000 home increases to $1,200,000.
Growing Market: This 20% appreciation also means the $900,000 home is now worth $1,080,000, and the $835,000 home is worth $1,002,000 today. These “lower priced” luxury homes weren’t part of the million-dollar market in prior years.
Since the Median Sales Price is the middle price, and there are homes priced at $1,000,000 each year that weren’t there the year before, the lower part of the pricing scale keeps replenishing. The fact that the higher-priced homes are reaching ever higher prices doesn’t seem to matter.
Even though the high end keeps getting higher, and there’s a big difference between a million-dollar home and a three-million-dollar home, the Median Sales Price for all homes sold above $1,000,000 has remained relatively flat over the years.
- Chris Butterworth
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* All chart data represents single-family detached homes only. Information is believed accurate but not guaranteed.