Homes may be getting more expensive, but that is not slowing down the nation's luxury home market. According to Realtor.com analysis, sales are up 25 percent year-over-year in this segment.
The study evaluated the entry-level of the luxury home market segment, the top 5 percent of all residential sales in 91 U.S. counties. The price for such properties grew an average 4.6 percent YOY. Javier Vivas, director of economic research for Realtor.com explains, “We’ve seen a substantial increase in buyer demand for high-end homes ... Today, $1 million won’t get you a luxury home in most major markets.” These homes are selling fast, too. Snohomish County, Wash., north of Seattle, has the fastest-paced luxury market in the nation. Properties there are on the market about 48 days, 3 percent faster than in 2017. The entry-level luxury home price in Snohomish County went up 13 percent in that time.
According to Patrick Carlisle, San Francisco-based chief market analyst for real estate company Compass, "$1 million to $2 million is considered our affordable house segment," adding, "Sales of homes of $2 million and above went up by 20 percent." The engine driving this growth is the Bay Area's strong economy, particularly the major tech companies. These companies pay their employees well in salary and stock. Also, smaller companies that have gone public have seen their employees become millionaires overnight. "IPOs have come back into style this year," Carlisle notes.
