Salt Lake City—Like affordability, the term luxury is often used loosely in today’s housing market. Once used to describe famous estates recognizable by name alone or opulent residences redefining the apartment concept, luxury may now be reduced to a convenient location and cushy amenities. Its meaning varies even further when analyzing different-sized markets across the United States, beyond the well-known house-hunting grounds of affluent home seekers. Even so, the one objective factor when describing a luxury listing is its price tag.
Considering a minimum price point of $1 million as a benchmark for what luxury entails, Point2 analysts looked at different-sized housing markets across the nation to determine how high-end they are. And because luxury can shift and amp its meaning depending on location, we checked the for-sale inventory in 30 large, 30 mid-sized and 30 small cities to rank them according to the availability of high-end housing. After analyzing the local shares of homes above $1 million and $5 million (where available), it turns out that small markets are not to be underestimated when it comes to glitzy housing options — just look at East Honolulu.
- Large cities: In Los Angeles, listings above $1 million make up around 64% of the for-sale market. LA also dominates the ultra-luxury sector, with almost 12% of its homes priced above $5 million.
- Mid-sized cities: California claims the three most luxurious mid-sized markets: Glendale (66%), Huntington Beach (63%), and Oxnard (43%) boast significant shares of high-end listings.
- Small cities: At more than 70%, East Honolulu has the highest share of luxury homes for sale. Meanwhile, in two other small markets, more than half of the listings are priced above $1 million — Bozeman, MT (62%) and North Bethesda, MD (55%)
2023 Sees Steady Nationwide Demand for Luxury Homes
House-hunting has no hurdles if you have a $1 million+ budget (or no concept of a budget)
Around this time in 2021, Point2 released a study on luxury homes in differently sized markets across the U.S. The in-depth look was prompted by news of luxury sales outpacing sales in other price segments. All this while the number of homes sold for under $100,000 fell compared to one year earlier.
Looking at the bigger picture, it’s more a matter of available options rather than financial preference. Specifically, elevated mortgage rates, home price spikes, a national housing shortage, and fierce competition make today’s housing market a hostile one for the average aspiring buyer. But, homebuyers with a budget of $1,000,000+ are anything but average.
In their 2023 luxury outlook report, Sotheby’s International Realty attributed the steady high-end sales to an explosion of personal wealth, as well as to homebuyers putting more of an emphasis on their home lives post-COVID. Moreover, many high-end transactions are made in cash, so the luxury residential sector is not as affected by interest rate fluctuations. These are the main reasons why, even though the end of 2022 came with a slowdown, demand for high-end housing remains strong this year. According to the Institute for Luxury Home Marketing:
“Despite lingering uncertainty outside the luxury real estate market, the steadiness of prices, sales, and inventory levels have resulted in a consistent increase in the demand for luxury properties during the first five months of 2023.”
Large Markets: Elevated Median Prices Redefine Luxury
Big cities in California lead the opulence list with significant shares of high-end homes & prices to boot
In many American markets, $1 million buys the home of anyone’s dreams. But, in markets where the median home price has already passed this mark, those dreams must be redefined. For instance, San Francisco homes are priced at $1.3 million, and San Jose’s are almost there at $1.24 million. So, it comes as no surprise that these cities have considerable shares of listings above this price threshold.
At 63.6%, Los Angeles has the highest percentage of properties with price tags of at least $1 million. Glamourous LA also boasts the highest share of ultra-luxury homes priced above $5 million: 11.6%.
In truth, it’s the homes for sale for over $5 million that give us a picture of what real luxury looks like in these more expensive markets. Accordingly, Boston follows Los Angeles with 9.4%, while San Diego takes the third spot with 7.6%. New York City is not far behind in ultra-luxury housing, with homes over $5 million representing 7.4% of total inventory.
Granted, with the most extensive inventory of homes for sale, NYC naturally also claims the highest number of luxury listings on the market — nearly 7,400, including more than 1,300 priced over $5 million.
Notably, the cities with the smallest shares of luxury homes for sale also display some of the lowest median prices. Leading the other end of the list is Detroit (median home price of $75,000), with only 1% of listings selling for at least $1 million. Likewise, Memphis, TN (median home price of $210,000) and El Paso, TX (median price of $243,000) are among the least luxurious of the 30 largest U.S. cities, with just 1.8% of homes priced above $1 million.
Mid-Sized Markets: In Terms of Luxury Listings, Many Mid-Sized Cities Fall Somewhere in the Middle
California bookends the luxury list: High-end homes make up 66% of Glendale inventory, but are non-existent in Moreno Valley
When it comes to mid-sized markets, California once again displays the largest share of homes priced above $1 million. Such homes make up 65.8% of the for-sale inventory in Glendale. Huntington Beach is on Glendale’s luxurious tail with 62.8%, followed by Oxanrd with 42.6%. These three also have the highest median prices among the mid-sized markets analyzed. In particular, Huntington Beach hits $1.1 million, on average; plus, at the time data was gathered, nearly 160 of the 250 listings active on the local market had price tags of $1 million or higher.
Similarly, Salt Lake City, UT, displays a hefty percentage of luxury listings (23.6%), followed by five other cities with shares of more than 10% (such as Hialeah, FL, with 15%, as well as Spring Valley and Enterprise NV, with more than 14%). Hovering around 6%-7%, Little Rock, AK, and Yonkers, NY boast lower percentages of high-end homes, much like Baton Rouge, LA, Modesto, CA, or Birmingham, AL.
At the other end of the spectrum, 13 mid-sized markets have somewhat negligible shares of luxury homes for sale, all lower than 4%. Interestingly, one California city finds itself at the opposite end of the ranking: Moreno Valley has zero homes for sale for $1 million or more.
Small Markets: Over 70% of Homes for Sale in East Honolulu Above the Million-Dollar Mark; No Luxury Listings in 7 Other Small Cities
High-end homes make up more than 62% of listings in less-tropical Bozeman, MT
When analyzing established luxury markets, chances are that we’re already thinking of big hubs and opulent ZIP codes. But luxury communities are peppered across the United States — and that includes smaller cities.
Among all of the markets analyzed — regardless of size — East Honolulu, HI, is the absolute winner when it comes to the share of inventory above $1 million at 70.5%. Despite being a small area with a population of a little more than 50,000, this tropical paradise displays a median home price of $1.3 million — the same as San Francisco. This makes sense, given that nearly 15% of homes for sale here have left the mere high-end realm long ago and entered the ultra-luxury segment above $5 million.
Rounding out the podium are two small markets where more than half the homes for sale are priced above $1 million: Bozeman, MT (62.4%) and North Bethesda, MD (54.7%). Not to be outdone, Cypress and Covina, CA, also have impressive high-end inventories: More than 36% of homes for sale in Cypress and in Covina come with price tags of at least $1 million.
On the other hand, seven markets had no luxury listings on the market at the time of the analysis: Florin, CA; Levittown, PA; East Hartford, CT; Troy, NY; Mishawaka, IN; Enid, OK; and Lakewood, OH.
Regardless of size, markets across the country have luxury properties lying in wait for the right buyer with the right budget. And, with today’s affluent homebuyer seemingly caring less about envied area codes and more about wellness and features that set their future home apart, the old saying rings truer than ever: There’s no place like (a high-end) home.
Point2, a division of Yardi Systems Inc., covers real estate trends and news. Point2 studies are based on internal data, public records, governmental sources, online research, and other reliable third-party agencies.
- The cities for each market category were selected based on population, as follows:
- Large Cities: The 30 largest markets among the 100 most populous in the U.S., with at least 500,000 people (populations of the cities included range from 8,736,047 to 592,211).
- Mid-Sized Cities: The 30 largest markets outside the 100 most populous in the U.S., with at least 150,000 people (populations of the cities included range from 225,676 to 195,992).
- Small Cities: The 30 markets with populations of 50,000 and up (populations of the cities included range from 51,646 to 50,076).
- The study was based on active listings at the time of the analysis (July 3rd, 2023).
- Median home prices were sourced from local MLSs, realtor associations, and reports from local listing portals.
- The types of residential properties included in the analysis of inventory were: house, townhouse, single family, condo, co-op, manufactured, mobile, and apartment.
- For the final list of active listings in each city, we examined and counted listings from Point2, Zillow, Redfin, and Realtor. To calculate the share of luxury real estate and create the final ranking, we selected and used the source with the highest number of listings available (duplicates were eliminated).