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Douglas Pilarski
Skyrocketing Luxury Home Prices in 10 US Cities
7 days ago
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Photo byRealtor.com
High-end homebuyers wanting to snap up an oceanfront property in West Palm Beach four years ago might have raised their eyebrows at price tags of around $1.7 million.
But, with spacious homes and lush gardens, the then-significant sum was not out of line for Florida’s alluring coastline.
Fast-forward to today, these properties have swelled in value, reaching nearly $4.5 million. And West Palm Beach is not alone.
Today’s buyers face a high-end housing market where multimillion-dollar price tags are entry-level, challenging even the most well-heeled buyers to recalibrate their visions of luxury living.
While the entire housing market experienced a historic price surge during the COVID-19 pandemic, driven by rock-bottom mortgage rates and shifts in working and commuting patterns, the luxury real estate market was unparalleled.
Across the U.S., luxury markets skyrocketed as many people sought larger homes and more space farther from urban centres due to remote work flexibility.
Realtor.com® has sifted through years of listing data to identify the high-end markets that are still as hot as ever. We tracked the most expensive 5% of all home listings in any given city and compared their prices in April 2024 with April 2020, just as the pandemic pump began.
Cities where luxury homes have seen sustained price growth and others have plateaued share some traits.
Photo byRealtor.com
Retiree havens and affordable luxuries
In cities such as West Palm Beach, FL, Lake Havasu City, AZ, and Reno, NV, luxury home prices have more than doubled. West Palm Beach leads this trend with an astounding 171% increase, soaring from around $1.65 million to more than $4.48 million.
These areas are highly appealing to retirees, and the equity they’ve amassed is likely a significant factor in home prices in these areas. West Palm Beach, Lake Havasu City, and Reno are all vital retiree destinations, or they’re where buyers are looking for relatively more affordable, wide-open spaces. -Hannah Jones, Realtor.com senior economic analyst
These locations exemplify the draw of sunny, warm climates and the lifestyle those attributes allow. And even as some markets have seen luxury prices stabilize, these cities continue to attract affluent buyers.
Thesee places probably gained popularity during the pandemic, and price growth has been sustained. One West Palm Beach home we found listed now for $2.9 million changed hands for only $525,000 three years ago. The listing explains that the home has a long list of renovations, contributing to the quintupled price. Many places probably gained popularity during the pandemic, and price growth has been sustained. One West Palm Beach home we found, listed now for $2.9 million, changed hands for only $525,000 three years ago. The listing explains that the home has a long list of renovations, contributing to the quintupled price,
Luxury demand migrates South
With a 137% increase in luxury home prices, Savannah, GA, highlights the growing demand for Southern luxury, combining historical allure with a lower cost of living.
Savannah has always had a Southern luxury vibe, with big, old trees and historic homes. A waterfront home with a private dock on nearly 3 acres is listed for $3.5 million. It previously sold for $1.7 million in 2021.
This waterfront home in Savannah, GA, is on the market for double what it was sold for just three years earlier.
Raleigh, NC, is another Southern city that’s seen sustained demand since before the pandemic. It has experienced significant luxury home price appreciation due to a tech sector boom, a strong job market, and high quality-of-life appeal. It’s a prime spot for those relocating from more expensive cities.
Jones says the Raleigh-Durham Research Triangle boom is similar to what happened in Austin and Denver due to the influx of tech workers moving from cities with much higher prices.
For those buyers who might sell a modest home in Boston or the San Francisco Bay Area, the equity can make a luxury home in Raleigh attainable.
Vacation destinations reshaping luxury real estate
When you think about the Hamptons, if you think about what we’ve seen for years with the rise of hybrid work and how people value work-life balance, people seem interested in owning in these areas.
This East Hampton home listed for $18 million changed hands three years ago for $4.9 million.
Park City is among America’s most famous ski towns. So, if remote workers can live anywhere and have cashed out in big coastal cities, it makes sense to see luxury prices rising here.
These areas have nearly doubled prices, even in the market’s highest echelons. This shows the continuing trend of affluent buyers investing in properties that combine luxury and leisure.
Finally, and unlike many other areas where luxury prices continue to climb, Midland, TX, a city of just 135,000 that sits halfway between Dallas and El Paso, has seen luxury prices rise by 77%.
Jones, a Texas resident herself, says this is likely due to oil mining operations that have ramped up over the years, creating a unique demographic.
Midland’s inclusion on this list is fascinating because oil workers make a lot of money. Those buyers can earn the money to spend big on a home.
With a pool of new buyers competing for higher-priced homes, the laws of supply and demand predict that prices will rise.
Here’s a more detailed look at the ten cities with the most significant price appreciation for the most expensive 5% of listings since the pandemic’s start. To ensure geographic diversity, we selected the single city with the most considerable appreciation per state.
Most expensive 5% of listings, April 2020: $870,050+
Most expensive 5% of listings, April 2024: $1,499,860+
Number of listings above $1,499,860 in April 2024: 20
SOURCE: Realtor.com
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Douglas Pilarski is an award-winning writer & journalist based on the West Coast. He writes about luxury goods, exotic cars, horology, tech, food, lifestyle, equestrian and rodeo, and millionaire travel.
You’re welcome to share your thoughts or tell me your story. Please email me here. dp1@sawyertms.com.
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