When It Comes to Homes, $5 Million Is the New $1 Million

If you want to get into the luxury home market, living in a $1 million home no longer cuts it. With more and more million-dollar homes swamping housing markets, $5 million is the new bar for luxury living.

On the heels of our 2016 report on Million Dollar Creep, we examine trophy-level living: what it used to be (starting at $1 million), what it is today ($5 million or more) and what the rest of us (everything below that) are missing out on.

In terms of all home values across the 100 largest metros—regardless of whether a home was listed on the market or not—a whopping 4.3% of them are currently valued at $1 million or more –quadruple the amount listed in 2002.  And guess, what? Though exclusive, the number of $5 million homes is growing at an even faster rate, nearly five times higher than the share in 2002.

In the last year millions of single-family homes and condos were listed on the market across America’s 100 largest metros. Of all listings, thousands—or 0.28%—were listed for $5 million or more. These ultra-expensive listings represent the most luxurious homes available in the last year. At Trulia we dug into home values and listing descriptions from the last year to see what kinds of homes warrant these lofty price tags and found:

• Million-dollar homes are no longer the domain of exclusivity; since 2012 the share homes valued at $1 million or more grew three times in San Francisco and nearly five times in Oakland, Calif. comprising 66% and 23.8% of the housing market, respectively.
• In pricey places like San Francisco listings priced at $5 million or more made up 3% of all listings. Long Island, N.Y., home to the tony Hamptons, had the second highest share at 2.2%.
• As one would expect, high-end buyers seek homes that check off the best in terms of location, property size, leisure amenities and bespoke design features.

The bar for owning a million-dollar home has dropped considerably over the years as these homes have become more prevalent in the housing market. Among the largest 100 metros, homes valued at $1 million or more comprise 4.3% of all homes, a share that has gone up 3.8 times since 2002. In some places $1 million is simply the cost of doing business.

In San Francisco, for example, homes in the $1 million plus range make up a full two-thirds of the housing market representing a near tripling of the share (22.4% in 2012) over the past five years. Nearby Oakland, Calif., saw the share of million-dollar plus homes grow nearly five times, from 5.1% of all home values in 2012 to 23.8% in 2017.

Five-million-dollar-plus homes now epitomize the new threshold for entry into luxury real estate. The rate of growth of the share of these super luxury homes, while starting from a smaller base, have outpaced their million-dollar counterparts by growing nearly five times since 2012 versus 3.8 among million dollar homes. Over the past year, the share of $5 million plus homes increased 19.8%, or two percentage more than $1 million plus homes.

Despite the fact that the median home price of all listings in the last year was $282,900, 86 of the largest 100 metros had at least one listing priced at $5 million or more. At first glance what sets $5 million or more homes apart is that they have ample room to roam. Super luxury homes tend to have two more bedrooms, four more bathrooms and three times the square footage of those with lower price points. Across the 11 metros with at least 100 super luxury listings, the median bathroom count outnumbered bedrooms among high-end homes, which was never true for lower-end listings. These luxe properties also covered a lot more land, typically occupying at least four times the acreage of other listings. Sure these ultra-expensive homes are bigger, but what does a home that boasts a price tag that’s 17.5 times more than the typical American home really buy you? For a list of luxury homes by market click here.

To better understand what separates the most expensive listings from the rest of the market, we analyzed Trulia’s listing descriptions to cull features that signal exclusive living. Super luxury listings are filled with the types of amenities one would expect the well-off buyers to appreciate. We break down what to expect from super luxury listings, pointing out examples of where to find specific amenities and how much more prevalent they are than homes for the rest of us.

Penthouses on Park Avenue or beachside homes in Malibu, Calif. earn multi-million-dollar price tags because of their prime locations. These luxe addresses are such because they lend themselves to waterfront access or spectacular skyline views. In fact, the greatest indicator of whether a listing was super luxury among the top 100 metros was the presence of breathtaking views. The rate at which “views” is mentioned was 87.8% of super luxury listings, or 6.6 times the rate among homes listed at less than $5 million.

In New York these luxury views are often of Central Park, the Manhattan skyline and the Hudson River where vertical location reflects its price-appropriate cachet. These views are afforded by condos on floors in the double digits as well as elusive penthouses. Among listings over $5 million, penthouses are mentioned at a rate of nearly 30% of all listings, while penthouses are only mentioned at a rate of 1.5% of other listings.

Likewise, mentions of “waterfront,” “beachfront,” or “oceanfront” access were nearly synonymous with super luxury listings, showing up at 60 times the frequency of other listings. Among super luxury listings in Long Island, ocean frontage appears at 15.6 times the rate of listings below $5 million.

Sprawling villas set among landscaped gardens evoke images of luxury living. Indeed, super luxury properties often occupy several lots and consume large amounts of acreage. Luxury homes in Los Angeles, for example are defined by expansive properties denoted by mentions of “estate” and “park-like” grounds. The terms “estate” and “grounds” appear at 15.9 and 8.0 more times among super luxury listings than other listings. Likewise, on Long Island it’s all about the acreage. The mention of “acres” occurs 5.4 times more in super luxury listing descriptions than in other listings, denoting the sheer size of these properties.

In some places super luxury homes dwarfed their lower-end counterparts by a significant margin. In Dallas, the median super luxury home is 4.5 times larger than other homes, measuring a sprawling 10,801 square feet compared to relatively modest 2,349 square feet for other homes listed in the area. In Ventura County, Calif., properties going for at least $5 million had a median lot size of 4.67 acres while all other listings occupied just 0.16 acres.

Super luxury homes also serve to fulfill the leisure needs of the affluent who don’t have to leave their properties to be entertained. In Long Island, super luxury real estate is concentrated in the Hamptons, home to properties serving as weekend or vacation homes for New Yorkers. Here, pools and tennis courts are typical among homes priced at $5 million or more. Among super luxury listings in Long Island these descriptors appear at 5.4 and 8.4 the rate of other listings, respectively. Among all super luxury listings pools are one of most commonly mentioned amenities where they appear among 64.5% of listings.

Entertaining others is also high on the minds of those seeking super luxury properties, and some over-the-top amenities indicate the value that regaling guests brings. In Long Island “entertaining” appears in 24.5% of listings, and in Los Angeles 29.5%. The presence of screening rooms are noted 307 times in luxury listings.

Super luxury homes truly set themselves apart by offering the most unique and exclusive home experience available. One-of-a-kind features and designs are the epitome of high-end homes. It’s no wonder that super luxury listings showcase custom features more than three times more than other listings. In addition, well-known architects and designers are called out 44.7 and 14.1 times more in super luxury listings than others.

Quirky and unique features offer a glimpse at truly elite living. We analyzed descriptors covering some of the wildest amenities on offer over the past year. Take a look at super luxury homes that feature amenities such as bulletproof glass, 24-karat gold fixtures and swim-up bars. Check out a current selection of $5 million-plus homes on the market.

To determine the share of home values crossing the $1 million and $5 million marks, we looked at the value of condominiums and single-family homes in the largest 100 metros whether or not they were currently listed on the market. Shares reflect snapshots of home values on Oct. 1 of each year.

Listing descriptions analyzed in this report represent all text descriptions provided to Trulia by listing agents for condominiums and single-family homes on the market from Oct. 1, 2016 to Oct. 1, 2017. Word frequency rates are determined by the number of times a term is mentioned divided by the total number of listings.