10 U.S. Cities Where Luxury Home Prices Are Skyrocketing to New Heights

10 U.S. Cities Where Luxury Home Prices Are Skyrocketing to New Heights

High-end homebuyers wanting to snap up an oceanfront property in West Palm Beach four years ago might have raised their eyebrows at price tags of around $1.7 million. But, with spacious homes and lush gardens, the then-significant sum was not out of line for Florida’s alluring coastline.

Fast-forward to today, and these same properties have swelled in value, reaching nearly $4.5 million. And West Palm Beach is not alone.

Today’s buyers face a high-end housing market where multimillion-dollar price tags are entry level, challenging even the most well-heeled buyers to recalibrate their visions of luxury living.

While the entire housing market experienced a historic surge in prices during the COVID-19 pandemic, driven by rock-bottom mortgage rates and shifts in working and commuting patterns, the luxury real estate market was unparalleled.

Across the U.S., luxury markets skyrocketed as many people sought larger homes and more space, farther from urban centers due to remote work flexibility.

In many areas, those prices came back down or plateaued; but in some cities, luxury price growth has continued unabated.

Realtor.com® has sifted through years of listing data to identify the high-end markets that are still as hot as ever. We tracked the most expensive 5% of all home listings, of any given city, then compared their prices in April 2024 with April 2020, just as the pandemic pump began.

It turns out, cities where luxury homes have seen sustained price growth and where others have plateaued share some traits.

 

Retiree havens and affordable luxuries

In cities such as West Palm Beach, FL, Lake Havasu City, AZ, and Reno, NV, luxury home prices have more than doubled. West Palm Beach leads this trend, with an astounding 171% increase, soaring from around $1.65 million to more than $4.48 million.

These areas have a strong appeal for retirees, and the equity they've amassed is likely a major factor in home prices in these areas, says Hannah Jones, Realtor.com senior economic analyst.

"West Palm Beach, Lake Havasu City, and Reno are all strong retiree destinations, or they're where buyers are looking for relatively more affordable, wide-open spaces," she says.

These locations exemplify the draw of sunny, warm climates and the lifestyle those attributes allow. And even as some markets have seen luxury prices stabilize, these cities continue to attract affluent buyers.

"A lot of these places, it's probably the case that they saw a ton of popularity during the pandemic, and that price growth has been kind of sustained," Jones explains.

One West Palm Beach home we found listed now for $2.9 million changed hands for only $525,000 three years ago. The listing explains that the home has a long list of renovations, contributing to the quintupled price.

 

Luxury demand migrates South

Savannah, GA, with a 137% increase in luxury home prices, highlights the growing demand for Southern luxury, combining historical allure with a lower cost of living.

"Savannah has always had a Southern luxury vibe," Jones says, "with big, old trees and historic homes."

We found a waterfront home with a private dock, sitting on nearly 3 acres in Savannah, listed for $3.5 million. It previously sold in 2021 for $1.7 million.

Another Southern city that's seen sustained demand since before the pandemic is Raleigh, NC. It has experienced significant luxury home price appreciation, which is due to the combination of a tech sector boom, a strong job market, and lots of quality-of-life appeal. It's a prime spot for those relocating from more expensive cities.

"The Raleigh-Durham Research Triangle boom is similar to what happened in Austin and Denver," Jones says of the influx of tech workers moving from cities with much higher prices.

For those buyers, who might sell a modest home in Boston or the San Francisco Bay Area, the equity can make a luxury home in Raleigh attainable.

"You can afford more for less, and it's still in a great job market, a strong economy, a great overall area," says Jones.

 

Vacation destinations reshaping luxury real estate

Cities such as East Hampton, NY, and Park City, UT, shine a light on the sustained appeal of luxury vacation markets.

"When you think about the Hamptons, if you think about what we've seen for years with the rise of hybrid work and the way people value work-life balance, people seem to be interested in actually owning in these areas," says Jones.

One East Hampton home for sale for $18 million—granted, it boasts a wondrous list of high-tech, contemporary features—was most recently sold in 2021 for $4.9 million.

Park City is among the most famous ski towns in America, so if remote workers can live anywhere and have cashed out in big coastal cities, it makes sense to see luxury prices rising here.

These areas have seen prices nearly double, even in the highest echelons of the market, showing the continuing trend of affluent buyers investing in properties that combine luxury and leisure.

Finally, and unlike many of the other areas where luxury prices continue to climb, Midland, TX, a city of just 135,000 that sits halfway between Dallas and El Paso, has seen luxury prices rise by 77%.

This is likely due to oil mining operations that have ramped up there over the years, creating a unique demographic, says Jones, a Texas resident herself.

"Midland being on this list is so interesting, because oil workers make a lot of money," Jones says of Midland. "And so those buyers can be earning the money to spend big on a home."

And with a pool of new buyers competing for higher-priced homes, the laws of supply and demand tell us those prices will rise.

Here's a more detailed look at the 10 cities with the biggest price appreciation for the most expensive 5% of listings since the start of the pandemic. We selected the single city with the biggest appreciation per state, to ensure geographic diversity.

 

Some Luxury Markets Hit New Heights

Since 2020, luxury home prices have soared. Here's where they've climbed the most.

 

1. West Palm Beach, FL

Most expensive 5% of listings, April 2020: $1,653,750+
Most expensive 5% of listings, April 2024: $4,486,250+
Increase: 171%
Number of listings above $4,486,250 in April 2024: 111

2. Savannah, GA

Most expensive 5% of listings, April 2020: $1,307,175+
Most expensive 5% of listings, April 2024: $3,103,000+
Increase: 137%
Number of listings above $3,103,000 in April 2024: 33

3. Lake Havasu City, AZ

Most expensive 5% of listings, April 2020: $925,125+
Most expensive 5% of listings, April 2024: $1,954,375+
Increase: 111%
Number of listings above $1,954,375 in April 2024: 28

4. Reno, NV

Most expensive 5% of listings, April 2020: $1,709,750+
Most expensive 5% of listings, April 2024: $3,436,950+
Increase: 101%
Number of listings above $3,436,950 in April 2024: 31

5. East Hampton, NY

Most expensive 5% of listings, April 2020: $7,607,000+
Most expensive 5% of listings, April 2024: $14,756,250+
Increase: 94%
Number of listings above $14,756,250 in April 2024: 15

6. Park City, UT

Most expensive 5% of listings, April 2020: $6,850,800+
Most expensive 5% of listings, April 2024: $12,771,250+
Increase: 86%
Number of listings above $12,771,250 in April 2024: 40

7. Raleigh, NC

Most expensive 5% of listings, April 2020: $1,395,000+
Most expensive 5% of listings, April 2024: $2,486,200+
Increase: 78%
Number of listings above $2,486,200 in April 2024: 55

8. Sevierville, TN

Most expensive 5% of listings, April 2020: $1,182,250+
Most expensive 5% of listings, April 2024: $2,100,000+
Increase: 78%
Number of listings above $2,100,000 in April 2024: 68

9. Midland, TX

Most expensive 5% of listings, April 2020: $898,713+
Most expensive 5% of listings, April 2024: $1,593,975+
Increase: 77%
Number of listings above $1,593,975 in April 2024: 23

10. Toms River, NJ

Most expensive 5% of listings, April 2020: $870,050+
Most expensive 5% of listings, April 2024: $1,499,860+
Increase: 72%
Number of listings above $1,499,860 in April 2024: 20

 

By: Evan Wyloge I Realtor.com I May 19, 2024


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