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The demand for luxury homes has exploded, rising nearly 81% for homes in the $1 million-plus range, according to a new report from Point2 Homes.
The report analyzed housing inventory in 30 large, 30 mid-sized and 20 small cities across the country, looking at the share of homes above $1 million, $3 million and $5 million to build their rankings.
Nationally, the number of homes selling for more than $1 million rose 81% to 17,216 in February from 9,635 the prior year, according to the National Association of Realtors.
Boston ranked sixth in the report’s list of the 30 largest cities’ share of luxury listings.
In Boston, where the median home price is $723,000, 34.8% of listings were above $1 million, 22.4% above $3 million and 4.7% above $5 million.
Beantown ranked second by share of homes above $3 million, following San Francisco in the top spot and Los Angeles in third.
High-end home sales surged nationwide in the three months ended April 30 as prices also rose, according to a new Redfin report.
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High-end home sales jumped 26% compared to a 14.8% increase in mid-priced home purchases and a 17.8% gain in affordable home purchases. An abundance of high-end homes hitting the market is helping this segment flourish, according to the report.
“So far, the economic recovery from the pandemic has disproportionately benefited Americans with bigger bank accounts,” Redfin Chief Economist Daryl Fairweather said in a press release. “This means a lot of the demand for homes is coming from folks who are well-off, while many lower-income Americans sit on the sidelines because they’ve been priced out of the housing market due to surging prices.”
San Francisco had the biggest surge in expensive property purchases at 82.4%, followed by Oakland Calif. at 71.8%, Miami at 70.4%, San Jose, Calif. 66% and Las Vegas 64.4%.
The prices of high-end homes also grew faster than the prices of affordable and mid-priced homes in that time period. High-end home prices hit a new record, rising 14.3% year over year compared to a record 12.4% increase in the prices of mid-priced homes and a 10.2% increase in the price of affordable homes.
Austin, Texas high-end home prices jumped 24.1%, followed by San Diego, Calif. Which grew 18%, Miami at 17.7%, West Palm Beach, Fla. at 17.6% and Phoenix, Ariz. 17.2%.
The number of high-end home listings also rose year over year during the three months ended April 30. Affordable listings grew 13.9% and mid-priced listings had a 9.1% increase
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Covid-19 has dealt a blow to New York’s luxury real estate market that is worse than the 2008 financial crisis and the 9/11 terrorist attacks.
The virus plowed into a market that was already scuffling, and industry pros now say that to encourage deals they may have to provide additional discounts that will sink prices even further, according to the Wall Street Journal.
Luxury properties sold in the second quarter showed an 11-percent price drop, the Journal noted, citing Douglas Elliman. New listings were also down, by 21 percent, while new listings priced at $4 million and over fell by about 35 percent, according to the Elliman data.
But besides having to adjust to virtual showings and the general drop in interest among potential high rise condo buyers — many of whom have opted for the Hamptons and Cape Cod outside the city — Manhattan agents also have to be mindful of the toll the virus has taken.
“Calling people now, it could be like calling them after shiva or after a funeral,” Ran Korolik, a Victor Group partner, told the Journal. “You don’t know who died or how people were affected by the situation. Maybe their client didn’t take a salary this year.” [WSJ] — Sasha Jones
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