Golden State Tops Destinations for Luxury Property Seekers

Point2 has examined the nation’s luxury home and investment property marketplaces, and found that while uncertainty looms in the traditional housing marketplace, the steadiness of prices, sales, and inventory levels have resulted in a consistent increase in the demand for luxury properties during the first five months of 2023.

In the analysis, Point 2’s Alexandra Ciuntu studied homes with a minimum price point of $1 million as a benchmark for what luxury entails, across the nation to determine how high-end they are. The study examined the for-sale inventory in 30 large, 30 mid-sized and 30 small cities, and ranked them according to the availability of high-end housing.

In terms of large U.S. cities, listings in Los Angeles above $1 million comprised nearly 64% of the for-sale market. Los Angeles also dominated the ultra-luxury sector, with nearly 12% of its homes priced above the $5 million mark.

California also claimed the three of the most luxurious mid-sized markets, with Glendale (66%), Huntington Beach (63%), and Oxnard (43%) reporting significant shares of high-end listings.

In terms of the nation’s small cities, at more than 70%, East Honolulu, Hawaii had the highest share of luxury homes for sale nationwide. In two additional small markets, more than half of the listings were priced above the $1 million mark with Bozeman, Montana (62%) and North Bethesda, Maryland (55%) reporting the top two highest totals.

Sotheby’s International Realty attributes the steady high-end sales to an explosion of personal wealth, as well as to homebuyers putting more of an emphasis on their home lives post-COVID. Many high-end transactions are made in cash, so the luxury residential sector is not as affected by interest rate fluctuations. These are the main reasons why, even though the end of 2022 came with a slowdown, demand for high-end housing remains strong this year.

“Despite lingering uncertainty outside the luxury real estate market, the steadiness of prices, sales, and inventory levels have resulted in a consistent increase in the demand for luxury properties during the first five months of 2023,” found the Institute for Luxury Home Marketing.

Large California cities led the nation in terms of high-end homes and home prices. Whereas in many American markets, $1 million can land one in the home of their dreams, the California markets of San Francisco, where homes are priced at $1.3 million, and San Jose, where homes are priced at $1.24 million, had a considerable number of listings above the $1 million mark. Leading the pack in California, Los Angeles reported the highest percentage of properties with price tags of at least $1 million with 63.6%, while also leading the nation in the share of ultra-luxury homes priced above $5 million at 11.6%.

For ultra-luxury homes priced above $5 million, the Boston area follows Los Angeles with a 9.4% share, while San Diego occupies the third spot with 7.6%, followed closely by New York City with 7.4% of total ultra-luxury inventory.

The cities reporting the smallest shares of luxury homes for sale also display some of the lowest median prices. Leading the other end of the list is Detroit (median home price of $75,000), with only 1% of listings selling for at least $1 million. while, Memphis, Tennessee, where the median home price stood at $210,000, and El Paso, Texas, where the median price was $243,000, were among the least luxurious of the 30 largest U.S. cities, with just 1.8% of homes priced above $1 million.

For the study, Point2 defined “Large Cities” as the 30 largest markets among the 100 most populous in the U.S., with at least 500,000 people (populations of the cities included range from 8,736,047 to 592,211). They defined “Mid-Sized Cities” as the 30 largest markets outside the 100 most populous in the U.S., with at least 150,000 people (populations of the cities included range from 225,676 to 195,992), and “Small Cities” as the 30 markets with populations of 50,000 and up (populations of the cities included range from 51,646 to 50,076). The study was based on active listings at the time of the analysis (July 3, 2023.

Click here for more information on Point2’s examination of the nation’s luxury home and investment property marketplace.