Stock Market Swoon Pulls Rug Out from under Luxury Home Sales
The Redfin report was for data only through April, and stocks have dropped quite a big further since then. "There are only two instances in the past decade when there were steeper declines: the three months ending June 30, 2020 and the three months ending May 31, 2020," the Redfin report said. The Redfin report blamed the "Cooling" of the luxury housing market on "Soaring interest rates, a tepid stock market, inflation, and economic certainty." The expression, "Tepid stock market," to describe the situation the stock market has been in since January should earn Redfin the understatement-of-the-year award. Luxury sales in these three months through April cited in the Redfin report hadn't yet been impacted by the recent sell-off in stocks, including the brutal drop last week. Sales of non-luxury homes had dropped only 5.4% over the same three-month period through April, the Redfin report found. Unlike the Redfin report, Olshan's data today - the 70% year-over-year plunge in the number of sales contracts of homes priced at $4 million and above in Manhattan - was impacted by at least part of the 11% stock market swoon in June so far. Stock market sell-offs, if sustained, get a little unnerving for people who have a lot at stake in the stock market, especially if the dynamics point at further repricing of assets as a result of a long and hard tightening cycle by the Fed, which is now belatedly cracking down on raging inflation..