The luxury real estate market has not been subjected to the same pressure as the rest of the housing market. Homes prices have skyrocketed across the board, but million-dollar homes have mostly avoided the severe inventory shortages that plague the housing market’s lower tiers.
- Luxury real estate is one of the fastest growing sectors in real estate
- The growth rate for $5 million homes is outpacing $1 million-dollar homes
- The share of homes valued over $5 million has increased about 20% in the past year
The housing market has been heating up for some years, and now incredibly high prices have boosted the luxury market to new heights. Today, almost 5% of the homes on the market cost more than $1 million.
The share of super-luxury homes – valued more than $5 million – is up to 0.28% and is growing even faster than $1 million homes. There are almost five times as many $5 million homes right now that there were in 2002.
The luxury real estate market is not spread evenly across the United States, despite its rapid growth. A handful of the most inflated U.S. markets are exploding with luxury inventory. In San Francisco, about 66% of homes are valued at $1 million or more, a segment that has tripled in share in the past year.
San Francisco also has the most $5 million homes. Super-luxury homes hold a 3% market share in San Francisco, about ten times the national rate. Long Island holds the second largest share of super-luxury homes, with 2.2% of homes priced for the super-rich.
“In certain areas, like San Francisco, you have a low inventory and high-income earners,” she said. “As they start to look for homes to buy, homes that were $1 million or $2 million years ago, people can get $5 million for now.”