The challenge of finding an affordable entry-level home in today’s housing market gets a lot of coverage. First-time buyers facing higher rent, difficulty saving for a down payment, and low inventory are an important demographic, and their habits have implications for the overall health of the market.
But, at the same time as the starter-home market has been hot, the demand for luxury homes has also ramped up. In fact, new research from Realtor.com shows sales of homes $1 million and higher are up 25 percent over last year – which represents the most significant jump since January 2014.
In short, the improved economy and job market has also led to an increase in demand for luxury homes, the same way it has elevated demand across all segments of the housing market.
Among specific regions, northern California leads the pack with four of the top 10 fastest-growing luxury markets. Other fast-growing markets include Denver, Seattle, and Nashville, which all have seen homes on the high-end of the market going under contract in fewer days than at this time last year.
Bottom Line from Realtor.com
- Luxury home prices continue to see robust growth this year, according to the latest data from the realtor.com Luxury Home Index.
- In the 91 luxury markets analyzed, the entry-level price for luxury, measured as the top five percent of all sales, increased 4.6% year-over-year on average.
- The top five fastest growing markets are Sarasota, FL; Collier, FL; Queens, NY; King, WA; and Monterey, CA – all seeing 13-20% price growth year-over-year.
- Southwest Florida, Northern California, Denver, Seattle, and Nashville continue to see double-digit growth in entry-level luxury prices.
- Million-dollar sales in the 91 markets combined are up 25% over last year, the biggest jump observed since January 2014.
- Luxury properties in most markets continue to sell faster than this time last year too, with the combined median age of inventory in the 91 luxury markets down 7 percent year-over-year on average.