Luxury Home Prices Gain Momentum in First Half of 2018

David Bartley, Sr
David Bartley, Sr
Published on July 26, 2018

 

Luxury home prices in key markets continue to surge in first half of the year

Highlights

  • 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.

Nationally, luxury home prices continue to post strong price gains

Continued growth in high paying jobs and stock market inertia have reignited the luxury market this year, driving buyer demand for high-end homes – even with prices costs of ownership swiftly on the rise. In the 91 luxury markets analyzed, the entry-level price for luxury (measured as the top five percent of all sales) increased 4.6 percent year-over-year on average. Some markets continue to grow at a breakneck pace; 17 of the 91 luxury markets are now seeing prices grow at 10 percent plus year-over-year, that’s five more markets seeing double-digit price gains compared to last December.

Additionally, 51 of the 91 luxury markets now have an entry point of at least $1 million, and a record 53 markets have the realtor.com Luxury Price Index surpass the 1.2 mark, suggesting prices of upscale homes in the majority of markets are now well above 2012 levels.

Consistent with that, the pace of sales in the segment continues to break last year’s records too. The combined median age of inventory in the 91 luxury markets was 105 days, down 7 days or 7 percent year-over-year on average. Additionally, two thirds of luxury markets are seeing inventory move faster than last year. The number of million-dollar transactions (sales at or above the $1 million mark) in the 91 markets combined is up 25 percent over last year, the biggest jump observed since January 2014, and two and half times the pace observed this January.

Southwest Florida continues to attract luxury buyers from the North

Luxury prices in a number of Florida markets continue to follow an upward trajectory. This month, Florida accounted for the top two fastest growing luxury counties, suggesting the inflow of demand for luxury properties remains strong. In particular, Sarasota and Collier counties have been accelerating rapidly, with entry level luxury prices now up 15-20 percent year-over-year. The median days on market of luxury properties in these two counties combined is now 143 days, down 22 percent year-over-year on average. In Sarasota, luxury prices have crossed the $1 million mark for the first time.

Luxury prices along the Northern California coast accelerate

The region now has 4 of the top 10 fastest growing luxury markets in the country, suggesting a strong tech sector and foreign interest are pushing demand for luxury properties to new heights. 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. The median days on market of luxury properties in these four counties combined is 96 days, one day faster than a year ago, and the fastest pace of luxury sales since June 2015.

Jersey City and Queens luxury markets buck the trend in the Northeast

In the northeast, most markets in New York and New Jersey continue to see luxury home prices stall or remain stationary. The Hudson NJ (Jersey City) and Queens NY 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, and demand appears to shift outward. The median days on market of luxury properties in Hudson and Queens combined is 66 days, down 29 percent year-over-year.

Demand for luxury homes in Denver extends farther out

Boulder, Douglas and Denver counties are all seeing double-digit price growth this month. The median days on market of luxury properties in these three counties combined is now 89 days, down 15 percent year-over-year on average, suggesting demand for million dollar homes is extending well beyond Denver proper.

Luxury suburbs north of Seattle grow rapidly

In the northwest, the Seattle metropolitan area continues to see pent-up demand for luxury properties. The entry-level luxury price in Snohomish county is now growing at the same pace as King county, up 13 percent year-over-year, as demand continues to spill-over farther north from the Seattle center. The median days on market of luxury properties in these two counties combined is now 48 days, down 3 percent year-over-year on average. Snohomish has the fastest moving luxury market in the country.

Nashville metro continues to attract luxury buyers

Demand for luxury homes in the Nashville metropolitan area continues an upward trajectory, with Williamson and Davidson counties seeing double-digit growth. The median days on market of luxury properties in these two counties combined is now 71 days, down 12 percent year-over-year on average.

Top 20 Fastest Growing Luxury Markets

Market (County Seat) Luxury Price (Top 5%) % Change Year-over-Year
Sarasota, FL (Sarasota) $1,000,000 19.7%
Collier, FL (Naples) $1,674,000 15.9%
Queens, NY (Queens) $1,258,000 15.9%
King, WA (Seattle) $1,511,000 13.7%
Monterey, CA (Salinas) $1,962,000 13.2%
Santa Clara, CA (San Jose) $2,774,000 13.1%
Boulder, CO (Boulder) $1,327,000 12.8%
Santa Cruz, CA (Santa Cruz) $1,616,000 12.7%
Snohomish, WA (Everett) $801,000 12.7%
San Mateo, CA (Redwood City) $3,475,000 12.3%
Hudson, NJ (Jersey City) $1,320,000 12.2%
Davidson, TN (Lexington) $784,000 11.9%
Douglas, CO (Castle Rock) $923,000 11.5%
Williamson, TN (Franklin) $1,037,000 10.7%
Denver, CO (Denver) $1,020,000 10.5%
Sacramento, CA (Sacramento) $673,000 10.1%
Clark, NV (Las Vegas) $589,000 9.9%
Riverside, CA (Riverside) $754,000 9.8%
Jefferson, CO (Golden) $816,000 9.5%
Maui, HI (Maui) $2,297,000 9.0%

Methodology

Realtor.com® Luxury Home Index analyzes 91 luxury counties, looking at yearly movement in the entry-level luxury price boundary, defined as the top 5 percent of all residential home sales in a given market in April 2018. The following markets were excluded from rankings this month as we review their data: Washoe, Nevada; Lake, Ill.; Dallas; and St. Louis. Age of inventory figures are median days on market for the top 5 percent of inventory based on asking prices in June 2018.

 

Want to know the value of your home?
Ours staff will figure it out for you for FREE.
Luxury Home Prices Gain Momentum in First Half of 2018
Please use a valid email.
Please fill in all fields.
view now