Times are good for those at the top: Twenty major U.S. counties saw double-digit price gains in June—many breaking records—according to the realtor.com® Luxury Home Index. And while one turbocharged market continued to dominate the top 20, its runner-up was quite a surprise.
Of course, what’s luxury in one area is commonplace in another. The index actually analyzes the entry-level luxury price tier, or the top 5% of all residential sales, in 90 counties. In 50 of those counties, the luxury tier starts at $1 million. Some markets have higher starting prices: San Francisco’s is a whopping $3.3 million.
“The strong stock market and economy gives luxury buyers additional cash,” says Danielle Hale, chief economist at realtor.com. “And real estate is a great way to spend that cash.”
Challenging the notion that what goes up must come down, the Sarasota County market in Florida continued to experience the fastest home-price growth, as it has since March. Prices increased 21% in June compared with the period one year earlier. Even with loftier prices, higher-end homes in Sarasota sell quickly. Half of all luxury homes in the area sold within 165 days in August, up 22% from the year before.
Greg Owens, president of the Realtor Association of Sarasota and Manatee, says the luxury market is doing well as more people move to the area. Owens, who is also operating principal of Keller Williams on the Water in Sarasota, says the healthy economy and the new federal rules on state taxes may be encouraging people to move to Florida.
“Beaches never get boring,” says Owens. “We are on the Gulf of Mexico. Where would you rather live?”
The surprising runner-up is the county of Queens in New York, humble hometown of the Mets, Archie Bunker, and Donald Trump. Sales of homes worth $1.3 million or more jumped 15.5% in June from the year-earlier period.
“Now you’re seeing people wearing Queens hats and T-shirts,” says Eric Benaim, a Queens native who is president of Modern Spaces, a real estate firm. Well-heeled buyers from Manhattan, Brooklyn, and northern New Jersey are moving to the previously uncool borough of New York City to get more space for their money.
Sales of homes and condos in the $1.2 million to $1.6 million range sell briskly, Benaim says. Within the past four weeks, his firm has sold about a dozen units in that price range, 50% more than the year-ago period.
Rounding out the top five counties for fastest-growing luxury home prices are Santa Clara, CA (14.5%), Boulder, CO (13.6%), and Collier, FL (13.4%). Northern California’s high-end real estate market continues to experience exceptional growth. Of the 20 luxury markets with the fastest-growing prices, seven counties around the San Francisco Bay Area had double-digit growth in June.
“It’s absolutely crazed,” says Patrick Carlisle, chief market analyst for the Bay Area for Compass, a real estate company based in New York City. “It’s the hottest luxury market ever.”
For the second quarter ending in June, the eight counties in the Bay Area had blistering luxury home sales, he says. Buyers haven’t seemed concerned with the federal tax law changes or interest rate hikes. The recent tech boom and the IPO surge have created new millionaires—and billionaires—who have money to spend on new glamorous digs.
Carlisle says competition for homes under $2 million in San Francisco is “feverish.” The median home sold price in the city is $1.6 million, and buyers often pay 15% to 18% over the list price.
“People are ferociously buying more affordable homes,” he says.
A surge of luxury homes and condos is coming on the market this month—45 so far, Carlisle says.
“We’ve blown past that record, and there are two weeks of listings to come,” he says.
The monthly total is expected to surpass the previous monthly record of 58 new home listings, set last September. For high-end condos, the peak was 51 in April. As of Tuesday, there are 65 new listings.
But not all markets known for their luxurious housing are showing such strength. Miami’s entry-level luxury price point may break $1 million this fall. After declining for 24 months, high-end home prices rebounded in January. Prices have reached their highest point since July 2015. Miami’s luxury market grew 2.2% in June, compared with June 2017.
Even with luxury home prices taking off, more affordable home prices are slowing down, Hale says.
“We are seeing a divergence,” she says. “There are a lot of opportunities for luxury buyers, but not as many opportunities for everyday home buyers.”
The 20 counties with the fastest luxury-home price gains
- Sarasota, FL
- Queens, NY
- Santa Clara, CA
- Boulder, CO
- Collier, FL
- Sonoma, CA
- King, WA
- Santa Cruz, CA
- Snohomish, WA
- San Mateo, CA
- Davidson, TN
- Williamson, TN
- San Francisco, CA
- Clackamas, OR
- Clark, NV
- Sacramento, CA
- Maui, HI
- Charleston, SC
- Douglas, CO
- San Luis Obispo, CA