Luxury home sales, particularly sales of the priciest 1 percent of homes, are surging. Sales of the most expensive homes in many local markets are up 21.1 percent this year, after a 35.7 percent gain last year, the real estate brokerage Redfin reports in its 2014 "Luxury Report." On the other hand, sales in the other 99 percent of the market have dropped 7.6 percent this year.
It’s a scenario playing out throughout the country: The top 1 percent of the housing market is booming, while the rest of the market has been slowing in its recovery due to sluggish wage and job growth, according to the analysis.
In about 10 housing markets, luxury home sales have surged above 50 percent this year. For example, Oakland and San Jose, Calif., are on track to nearly double the number of home sales since last year in the most expensive 1 percent of the market, according to the report.
Metros vary on the price to reach the top 1 percent of the housing market. For example, in San Francisco, the most expensive 1 percent of homes sold for $5.35 million or more. In Los Angeles, the most expensive homes sold for at least $3.65 million, and in Orange County, they sold for at least $3.45 million. On the other hand, in some markets, the top 1 percent of home sales can be purchased for six figures, such as Atlanta, where the top 1 percent of home sales averages $861,000, or in Minneapolis, where it averages $881,000.
According to Redfin’s analysis, neighborhoods in Los Angeles, Orange County, and San Francisco dominate the list of markets with the highest number of luxury home sales. On its top 20 neighborhood list, the top three neighborhood leaders were: Beverly Glenn ($11.86 million); Holmby Hills ($9.91 million); and Malibu Road ($9.51 million).
Source: “2014 Luxury Report: Sales of Priciest 1% of Homes climb While Rest of Home Sales Down,” Redfin (May 27, 2014)