Everyday Economics

Why Luxury Buyers Are Lining Up in Chicago, but Not Seattle

4d ago · 14:08

The housing market is shut to almost everybody, but at the very top, buyers are still lining up and there aren’t enough homes to sell them. On this episode of Everyday Economics from The Center Square, publisher Chris Krug and PhD economist Dr. Orphe Divounguy dig into his latest column on the luxury buyer pool. With mortgage rates around 7.4% and homebuilder confidence at 32 (down from 68 in 2019), most of the market is strained. But using Redfin data on the top 5% of homes in each market, Dr. Divounguy finds the luxury segment is highly competitive, driven by AI-fueled stock gains and fast-rising incomes at the top. They look at why luxury inventory is so scarce in Midwest markets like Kansas City, St. Louis, and Chicago; why Jacksonville is tight while Miami and Fort Lauderdale have plenty of supply; and why Seattle is moving the other way, with its luxury buyer pool down 14% and listings up 9% amid tech layoffs, a proposed $100,000 fee on certain new H-1B petitions, and the state’s new tax on income over $1 million. Plus, why policy risk matters for housing demand and investment, and how San Francisco is riding the AI boom.