Luxury home sales and prices are surging, according to the realtor.com® June 2018 Luxury Home Index released today.
The Index reveals $1 million plus home sales are up 25%, despite the fact it costs on average 4.6% 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% 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.”
In the 91 luxury markets analyzed, the entry-level price for luxury increased an average of 4.6% year-over-year. Some markets continue to grow at a breakneck pace; 17 of the 91 luxury markets are now seeing more than 10% price growth year-over-year.
The pace of sales in the luxury segment continues to break last year’s records. The combined median age of inventory in the 91 luxury markets was 105 days, down 7 days or 6.5% year-over-year. Additionally, two thirds of luxury markets are seeing inventory move faster than last year.
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% over last year. That is the biggest jump observed since January 2014, and two and half times the pace observed this January.
The Northern California 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% year-over-year.
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% year-over-year.
In the Pacific Northwest, the entry-level luxury price in Seattle area’s King County and the further outlying Snohomish County is up 13% year-over-year. The median days on market of luxury properties in these two counties is now a combined 48 days, down 3% year-over-year on average. Snohomish is currently the fastest-moving luxury market in the country.
In Nashville’s Williamson and Davidson counties, the median days on market for luxury properties is now 71 days, down 12% year-over-year on average.
Most markets in New York and New Jersey continue to see luxury prices stall or remain stationary. The Hudson, N.J.(Jersey City) and Queens, N.Y. markets remain the exception, and both continue to see well above average, double-digit price growth. These two markets offer a lower luxury entry point compared with Manhattan and Brooklyn, where growth remains stagnant. The median days on market of luxury properties in Hudson and Queens combined is 66 days, down 29% year-over-year.
