The New Entry Point for American Luxury-Home Buyers: $1 Million
Got a million bucks to spend on a new home? Good. Just don’t expect a palace.
(Bloomberg) -- Got a million bucks to spend on a new home? Good. Just don’t expect a palace.
The starting price for the most expensive 5 percent of U.S. residential properties sold in April was at least $1 million in more than half the luxury markets Realtor.com analyzed for its latest report. Sales of million-dollar-plus real estate jumped 25 percent from April of last year, even as prices at the top of the market rose 4.6 percent, according to the listings-and-research site.
That’s the biggest sales increase in high-end homes since January 2014 and more than twice this January’s pace. April is the most recent period for which Realtor.com has crunched the numbers.
High wages in the tech sector and other industries are fueling demand for properties in Silicon Valley and the Seattle and Denver areas, among those with the biggest high-end price increases. In New York, sticker shock in Manhattan and Brooklyn is pushing even well-heeled buyers into neighboring Queens, where the price of entry-level luxury rose 15.9 percent. Wealthy retirees are flocking to Sarasota, Florida. There the jump was almost 20 percent, the most in Realtor.com’s ranking.
“Continued growth in high-paying jobs and stock market inertia have reignited many luxury markets this year,” Javier Vivas, director of economic research for Realtor.com, said in a statement. “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.”
That’s today -- tomorrow could be worse. In 17 of the 91 markets Realtor.com has been tracking, price growth now exceeds 10 percent.
To contact the reporter on this story: Prashant Gopal in Boston at pgopal2@bloomberg.net
To contact the editors responsible for this story: Daniel Taub at dtaub@bloomberg.net, Peter Jeffrey
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