Inboxes are abuzz with the latest reports on the luxury home market. In particular, I’d like to share the news from the National Association of Realtors Luxury Home Index and the “Move Over Miami” report from Redfin. When these reports are issued each fall, it’s always fascinating to see how the market measures up to the myths. Working within the market, seeing day-to-day transactions, hearing the “buzz” about prices and trends, is just one perspective. These studies are another.
The Luxury Homes Index identifies and ranks the top luxury markets in the U.S., measuring by price, sales volume, and luxury market absorption and velocity. It covers 277 counties and 63 metropolitan areas, generating metrics and rankings at both levels of geography.
October’s report finds California in a position of strength. Ranked by county, seven of the top ten are in California, with San Francisco County in number one position. Although Manhattan still holds top ranking for both listing and sales price, California’s market shows significant recovery from the recession, with improved activity and prices. Los Angeles County’s luxury market, which includes Beverly Hills, is in third position overall (after Brooklyn), but takes the prize for both total sales volume and average number of monthly sales.
There are a few stand-out curiosities in the report. For sales prices among the top 1% of the market, Kauai, Hawaii, is in first position (followed by Manhattan and Maui). Among the “Biggest Movers” in the luxury market, San Juan County, Washington, is at the top (followed by Clackamas, Oregon, and San Bernardino County)–and if you’ve been to the San Juan Islands, that’s no surprise.
Redfin tracks the most expensive 5 percent of homes sold in more than 1,000 U.S. cities. In its brand new report, “Move Over Miami: Luxury Home Prices Soar in Delray Beach and Boca Raton,” Redfin puts Palm Beach County in the sizzle category. In both Delray Beach and Boca Raton, average prices soared year-over-year: 70% and 38%, respectively.
The heated market is thanks in part to new development in the waterfront and downtown areas, bringing luxury accommodations to areas that were once occupied by more modest single family homes. Water access and nearby restaurants are appealing to both full-time residents and second-home buyers.
In Redfin’s list of the top-performing fifteen luxury markets, San Francisco was the only California city, with average sales prices climbing 22 percent. While Los Angeles didn’t make the cut for Redfin, luxury prices in L.A. were up 5 percent year over year–great news for our market.
Redfin also tracks the “bottom 95 percent” of the market and found positive change there as well, with average sales prices up year over year. Delray Beach was again in top spot, with a 21% gain.
In addition, Redfin tracks the “biggest losers” in both the luxury market and the rest of the market. (Fremont, Oakland, and San Diego appear on that list, showing luxury sales price downturns of 8%, 2%, and 1%, respectively.) Interestingly, Redfin notes that “in every city on our ‘biggest losers’ list, only luxury home prices fell in the third quarter, while the bottom 95 percent of the market saw prices rise.”
You can view the Redfin report and the Luxury Homes Index online or read Mansion Global’s editorial, which offers additional detail. And of course, if you have any questions about the luxury marketplace, I would be happy to talk with you.