More people are searching for homes priced higher than $1 million than at any time in the past four years according to a recent Redfin study, though Chicago’s $1 million-plus searches lag behind the national average.
Since the beginning of 2017, Redfin has tracked the number of home searches conducted on its website that are filtered exclusively by the $1 million and higher price point. In January, 10.8% of those tracked searches were for homes in the $1 million-plus range. That’s a significant year-over-year increase over the 8.5% recorded in January 2020.
In Chicago, 4.4% of last year’s Redfin searches were for homes priced higher than $1 million.
Searches for $1 million-plus homes were most common in five California markets: San Jose (48.5%); San Francisco (48%), Oakland (31.8%), Anaheim (25.1%) and Los Angeles (24.9%). Those markets also represented the highest median sale prices, with San Francisco topping the group at $1.4 million and San Jose at $1.2 million, followed by Oakland ($817,000), Anaheim ($800,000) and Los Angeles ($730,000).
Low mortgage rates are one reason for the increase in searches for $1 million-plus homes. Skyrocketing home values are another. Nationally, the median sale price rose by 13% year-over-year in December. The K-shaped recovery from the economic crisis spurred by the COVID-19 pandemic is another contributing factor, as the wealthy are the people most likely to be looking for homes. Sales of homes at the luxury end of the market rose by 61% in the three months ending November 30, according to Redfin.
Conversely, 36% of Redfin.com searches carried out in January were filtered for homes priced below $500,000, a year-over-year drop from 39.3% last January and the lowest share since September 2017.
“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.”