Real Estate

Luxury home prices finally getting too high?

A sign advertising an open house in Corona Del Mar, California.
Scott Mlyn | CNBC

The tables have turned in the real estate industry as luxury listing prices fell for the first time since 2012, according to a Redfin report. The brokerage firm suggests that the drop in prices stems from wealthy buyers and foreign investors refusing to buy at the top of the market.

Prices for luxury homes fell by 2.2 percent in the third quarter, compared to a year ago, according to the report.

"Luxury buyers don't buy because they need a place to live, so they have flexibility to time a home purchase when the market is favorable," the company's report noted.

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"I think that the report was accurate in that prices have almost retraced their all-time high, which was 2006,"  Philip White, CEO of Sotheby's International Realty, told CNBC's "Closing Bell."

In the same vein, White says the luxury market is healthier than it was before the crash in 2008. 

"It's even stronger; I think it's more stable, it's less erratic and the long-term value is even stronger than it was then," he said. "It was a sharp drop-off as we all know, and it's taken a long time to really get to this recovery point." 

While many market watchers feared that the Fed raising interest rates may increase mortgage prices further, this market is not directly affected by those changes, White said.

"A lot of our transactions are all cash, and even the slight short-term interest increase really doesn't affect the mortgage rates in a significant way," he noted.

Despite challenging inventory in some markets and the recent price dip, White says Sotheby's International Realty had a "really good year." 

"We've had a very good three- to four-year period where we've outpaced the overall market, really bad, about two-to-one," he said.