When home sale activity slowsdown, it often foretells of an upcoming recession, but the slowdownof the home market this year and the surplus of luxury homes on themarket isn't cause for concern. Interest rate fluctuations havebeen the primary cause of waning housing activity.

“Historically, a slowdown in luxury homes sales is typicallyviewed as a precursor to a slowdown in the housing market as awhole,” Yin Ho, an associate in the real estateteam of international law firm Withers, tellsGlobeSt.com. “The housing market through 2019 has already cooledmeasurably, but this could have been attributed to the risinginterest rates in the early part of the year—which have sincelowered—the effects of the Tax Cuts and Jobs Act of 2017, andgeneral skepticism surrounding economic growth.”

In addition, housing sales have slowed for luxury home inparticular, and Ho reports a surplus of mansions on the market.“Luxury home sales represent only a small portion of the housingmarket, and the surplus issue in Los Angeles is so unique, that Iwould caution how this impact bears on the rest of the market,” headds.