Luxury homes are having a great run this summer with both sales and prices for these properties rising in June. This according to the latest Luxury Home Index released by Realtor.com on Thursday. The index analyzes the entry-level luxury price tier defined as the top 5 percent of all residential sales in 91 U.S. counties.
According to Realtor.com, the $1 million price point for luxury homes has become the entry point for most markets. As a result, sales for these homes are up 25 percent despite costs for these homes rising by 4.6 percent compared to last year. Of the 91 markets analyzed for the index, 41 had an entry point of at least $1 million.
“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. Today, $1 million won’t get you a luxury home in most major markets.”
The report indicated that some markets continued to grow at a breakneck pace with 17 of the 91 luxury markets seeing more than 10 percent price growth year-over-year. The combined median age of inventory for homes in this market 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.
Northern California continued to dominate the luxury market scene with four of the top 10 fastest growing markets based in this region. Prices for high-end properties also accelerated at a fast pace across the state as the tech sector and strong foreign interest pushed demand for luxury properties, the report revealed. 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. However, the two Florida markets, Sarasota County and Collier in Naples continued to top the luxury property market with sale prices in these markets rising 19.7 percent and 15.9 percent respectively.
Demand for luxury homes also grew in Denver, Seattle, and Nashville. According to the report, "Denver’s boom has extended further outward, with Boulder, Douglas, and Denver counties all seeing double-digit annual price growth in the luxury tier. The median days on market for luxury properties in these three counties is 89 days, also down 15 percent year-over-year."
While the luxury markets in New York and New Jersey have seen the stall, Hudson, Jersey City, and Queens in New York continued to see double-digit price growth for luxury homes. the report said.
Learn more about the New York Housing Markets: