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48 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T DATA THE LATEST Luxury Homes Outpaced by Rest of Market Non-luxury homes experienced faster home price appreciation than luxury homes for the eighth consecutive quarter. S eattle-based real estate brokerage Redfin report- ed luxury home prices climbed much slower than more modestly priced homes within the same time period. Luxury home prices rose 0.7 percent in the fourth quarter of 2016 compared to 2015, to an average of $1.6 million, according to Redfin. Redfin's analysis tracks home sales in more than 1,000 cities across the country and defines a home as luxury if it is among the top 5 percent of most expensive homes sold in the city in each quarter. The bottom 95 percent of the market performed far better than the luxury market in the fourth quarter. This marks the eighth consecu - tive quarter where non-luxury properties outperformed their luxury counterparts in price growth. An average non-luxury home sold for $312,000, up 6.1 per - cent compared to a year earlier, the largest such gain since the first quarter of 2014. Nela Richardson, Redfin's Chief Economist, said the "Trump rally" in the stock market did little to move prices in luxury real estate. "Cities with booming luxury markets attracted traditional high- income buyers seeking a place to live, work and grow their families," Richardson said. "Prices in cities with more transient luxury buyers, looking for investments or a place to park their wealth, had more tepid growth to close out 2016." The supply of homes for sale above $1 million ticked up 0.6 percent in the fourth quarter, compared to a year earlier, while the number of homes priced above $5 million jumped 15.1 percent. San Francisco led the nation with the highest average sales price for a luxury home at $5,816,000. Los Angeles, Boston, Oakland, and Santa Clarita, California followed quickly behind. Santa Clarita, a suburb of Los Angeles, showed the highest price gain, up 113.8 percent in the fourth quarter compared to a year earlier, to an average of $2.0 million. "Santa Clarita has seen a lot of new construction and master- planned community developments over the past few years, which are raising its profile and attracting new buyers as these homes are now appearing on the market," said Redfin real estate agent John Underwood. "Most luxury home - buyers in Santa Clarita commute to Los Angeles, but they get far more bang for their buck living in this suburb, where price per square foot is very favorable. The public school system in Santa Clarita is highly rated, which is a draw as well." Optimism Surges Among Potential Millennial Buyers Almost 70 percent of Americans believe 2017 will be a better year for the housing market than last year. T he new administration spurred a surge in opti- mism among non-home owning millennials for the housing market this year, according to the latest quarterly Modern Homebuyer Survey for ValueInsured. The first Modern Homebuyer Survey released post-inaugu - ration revealed that 69 percent of Americans believe 2017 will be a better year for the housing market than last year, according to ValueInsured. Whereas the previous Modern Homebuyer Survey released in October found millennials largely hesitant to become homeowners, the latest poll found a renewed optimism prevailing in that group despite mortgage rates surging to a two-year high in January. ValueInsured's Housing Confidence, reflecting seven housing confidence measures from the Homebuyer Survey, reported an increase of 5 points among non-home owning millen - nials (up to 61.3). In all, 62 percent of millenni- als (and 58 percent of Americans overall) said they believe 2017 will bring a more favorable housing market. Nearly six in 10 (59 percent) of millennials (and 52 percent of Americans overall) polled said they believe the new administration will make the housing market more favorable. Nearly three-quarters (74 percent) of current homeowners said they think it will be easier for them to upgrade to a new home this year, according to ValueInsured. The down payment, which has been shown in many studies to be one of the greatest obsta - cles to achieving homeownership, may be less of an issue in 2017, or at least prospective homebuy- ers believe it will. Nearly half (44 percent) of millennials said they were confident they could afford a down payment, an increase of 6 percentage points from the previous Modern Homebuyer Survey. Approximately 41 percent of millennials said they believe it will be easier to buy a home in 2017, ValueInsured reported. Nearly eight in 10 of those polled said they believe owning is better than renting (78 percent) and that homeownership is part of the American Dream (79 percent). "I recommend Americans, especially first-time buyers, absolutely pursue their dream of owning a home," said Joe Melendez, CEO of ValueInsured. "But it's up to us as an industry to help make them feel more confident in doing so, and that starts with us giving them greater certainty by protecting their down payments." The surge in confidence among non-home owning mil - lennials, combined with other industry reports, suggests that eager first-time buyers will drive the housing market this year, according to ValueInsured. The 2016 Profile of Homebuyers and Sellers from the National Association of Realtors, released late last year, showed the annual first-time buyer share to be great - er than one-third (35 percent).