Luxury Housing is Hot Hot Hot

Luxury Home Market Prices are surging

(Westlake Village, Ca) Westlake Village based Move.com released its realtor.com® June 2018 Luxury Home Index reflecting that Luxury home sales and prices are surging. The Index reveals $1 million plus home sales are up 25 percent, despite the fact it costs on average 4.6 percent more to enter the high-end market this year compared to last year.

The index analyzes the entry-level luxury price tier, defined as the top 5 percent of all residential sales, in 91 U.S. counties.

“Continued growth in high paying jobs and stock market inertia have reignited many luxury markets this year,” said Javier Vivas, director of economic research for realtor.com®. “We’ve seen a substantial increase in buyer demand for high-end homes — even with prices and costs of ownership swiftly on the rise.”

Nationally, luxury home prices and demand continue to rise

In the 91 luxury markets analyzed, the entry-level price for luxury increased an average of 4.6 percent year-over-year. Some markets continue to grow at a breakneck pace; 17 of the 91 luxury markets are now seeing more than 10 percent price growth year-over-year.

The pace of sales in the luxury segment continues to break last year’s records, too. The combined median age of inventory in the 91 luxury markets was 105 days, down 7 days or 6.5 percent year-over-year. Additionally, two thirds of luxury markets are seeing inventory move faster than last year.

$1 million plus is new norm for luxury homes

In 51 of the 91 markets analyzed, the luxury home tier currently has an entry point of at least $1 million. The number of sales at or above the $1 million mark in the 91 markets is also up 25 percent over last year. That is the biggest jump observed since January 2014, and two and half times the pace observed this January.

Luxury prices along the Northern California coast accelerate

The region now has four of the top 10 fastest-growing luxury markets in the country, indicating that the booming tech sector and strong foreign interest are pushing demand for luxury properties to new heights. Bay Area markets of Santa Cruz, San Mateo, Santa Clara, and Monterey have all been growing at an accelerating pace, with entry-level luxury prices now up 12-14 percent year-over-year.

Age of Inventory

Consistent with that, the pace of sales in the segment continues to break last year’s records too. The combined median age of inventory in the 91 luxury markets was 105 days, down 7 days or 7 percent year-over-year on average. Additionally, two thirds of luxury markets are seeing inventory move faster than last year. The number of million-dollar transactions (sales at or above the $1 million mark) in the 91 markets combined is up 25 percent over last year, the biggest jump observed since January 2014, and two and half times the pace observed this January.

Methodology

Realtor.com® Luxury Home Index analyzes 91 luxury counties, looking at yearly movement in the entry-level luxury price boundary, defined as the top 5 percent of all residential home sales in a given market in April 2018. Age of inventory figures are median days on market for the top 5 percent of inventory based on asking prices in June 2018.

NOTE: The following markets were excluded from rankings this month as their data is being reviewed: Washoe, Nevada; Lake, Ill.; Dallas; and St. Louis.

Top 10 Fastest Growing Luxury Markets

Market (By County)

Luxury Sales Price

(Top 5%)

% Change Year-over-
Year

Sarasota County (Sarasota, Fla.)

$1,000,000

19.7%

Collier, FL (Naples, Fla.)

$1,674,000

15.9%

Queens County (Queens, N.Y.)

$1,258,000

15.9%

King County (Seattle, Wash.)

$1,511,000

13.7%

Monterey, CA (Salinas, Calif.)

$1,962,000

13.2%

Santa Clara County (San Jose, Calif.)

$2,774,000

13.1%

Boulder, CO (Boulder, Colo.)

$1,327,000

12.8%

Santa Cruz, CA (Santa Cruz, Calif.)

$1,616,000

12.7%

Snohomish County (Everett, Wash.)

$801,000

12.7%

San Mateo County (Redwood City, Calif.)

$3,475,000

12.3%

 

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