Luxury Homes for Less: The Top 11 Cities Where Sellers Are Slashing Prices on Their Posh Properties

Luxury Homes for Less: The Top 11 Cities Where Sellers Are Slashing Prices on Their Posh Properties

April 19, 2024
Austin TX, data journalism, key west fl, Lakeland FL, luxury homes, Memphis TN, Missoula MT, Naples FL, North Port FL, Phoenix AZ, Punta Gorda FL, Sherman TX, Tampa FL, Trends
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Clare Trapasso

Sellers of high-end homes are increasingly resorting to price cuts to lure buyers to their lavish properties, which most folks can only dream of owning.

About 10.7% of homes on the market priced between $2 million and $5 million underwent price reductions in March, according to a Realtor.com® analysis. But high-end home sellers are slashing prices at much greater numbers in certain parts of the country. We identified the luxury real estate markets that had the highest percentage of price cuts.

“The top luxury markets seeing price reductions are primarily in the South,” says Hannah Jones, senior economic research analyst at Realtor.com. “Before the run-up in prices during the [COVID-19] pandemic, you could get a lot more for your money in these markets. Buyers are looking for that again. And buyers at this price point have a lot more options, so they can afford to be pickier.”

Six of the top 11 markets were in Florida. Price reductions in the state were up 74.7% year over year in March, according to Realtor.com data.

Five of these Florida markets were on the storm-prone Gulf of Mexico.

“A lot of these properties in Florida are at a high risk from climate-related events, such as hurricanes,” says Jones.

Those climate risks are resulting in higher insurance costs, which might make it harder for homeowners to sell properties in the state. Insurance premiums in the state were up 43.2% from 2018 through 2023, according to a S&P Global Market Intelligence analysis.

“The insurance is what’s killing us right now,” says Lakeland, FL, real estate agent Michelle Schaal, of Keller Williams Smart 1 Realty. “There’s a lot of insurance companies that are pulling out of Florida right now. [And] insurance on that large of a property is going to be costly.”

The Central Florida metropolitan area of Lakeland had the highest percentage of price reductions on homes priced between $2 million and $5 million in March. Schaal’s own insurance policy in the Lakeland suburb of Bartow has more than doubled in just two years.

Plus, there aren’t as many buyers who can afford homes priced over $2 million. So these properties tend to sit on the market for longer. Sellers might resort to price cuts to make their residences more appealing and speed up sales.

“There are sellers who are realistic,” says Schaal. “And then there are those who overprice their homes. … These homes may sit for a while, and they may have to lower that price point.”

To figure out which housing markets had the highest percentage of luxury home price reductions, we looked at Realtor.com data for homes priced between $2 million and $5 million in March.

So where can buyers get a deal on luxury homes?