The Super-Luxury Market for $5 million Homes is Growing Rapidly
By Maggie Wilson @ Real Estate Daily
January 19, 2018

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.

Key Takeaways

  • 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

Brief

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.”