Home values in entry-level and mid-market ZIP codes ended 2015 at gains of 4.7% and 5.0% respectively, while luxury home values lost mojo, spiking 3.3%. These numbers reflect a stall in the luxury market in the second half of 2015, as the entry-level and mid-market ZIP codes continued to improve.
Zillow Research staffer Aaron Terrazas reports on how Zillow classifies each of the three markets as well as the factors that were possibly responsible for the lag in the luxury market:
- More hesitant foreign buyers in the long-term in the face of strong U.S. dollar appreciation and financial turmoil overseas;
- A slowing and normalization in home value growth overall after the rapid pace observed in recent years;
- And continued upward pressure on entry-level home values because of strong demand and limited supply of homes for sale in these markets.