A surge in wealth in the United States over the past 12 months has stimulated second-home markets in states like Hawaii and Colorado, according to data from Realtor.com.
Maui, Hawaii, and Eagle County, Colorado, saw the country’s fastest luxury price growth, even beating out metropolitan housing hubs like New York City and San Francisco and their expensive suburbs, according to the data.
In Maui, luxury prices, defined as the top 5% of sales, increased nearly 33% to an average of $2.485 million in 2017 compared to the year prior, according to Realtor, which will release its full report on Jan. 4.
The U.S. led the world in wealth gains over the past year, tallying more than a million new millionaires in the last year as stock prices surged, according to Credit Suisse’s Global Wealth Report published last month.
“So far, the Trump presidency has seen businesses flourish and employment grow, though the ongoing supportive role played by the Federal Reserve has undoubtedly played a part here as well, and wealth inequality remains a prominent issue,” said Michael O'Sullivan, CIO for International Wealth Management at Credit Suisse.
The Hawaiian islands have dominated price growth as constrained inventory pushes prices up in the mainstream market, too. In Maui, median sales prices soared 9.5% in the mainstream market.
While Maui topped the list last year, more islands have crept into Realtor’s top 10 in terms of luxury price appreciation. Kauai came in at No. 4 in the country with a 25% leap in average luxury price in 2017. The Big Island (Hawaii) came in No. 5 with a 24.8% price increase in 2017.
Realtor’s rankings compare 74 counties, all have which have seen at least 100 home transactions valued at least $1 million.
Eagle County, home to trendy ski resorts like Vail and Beaver Creek, ranked No. 2 in the country for luxury price growth as the area transforms into a year-round retreat. Average prices jumped 31.5% in 2017 to $2.89 million.
“More than anything people look at property here as a blue chip asset in a real estate portfolio,” said Matthew Blake, a Vail-based broker for LIV Sotheby’s International Realty. “There are more golf courses than stop lights in Eagle County.”
Stock market gains have led to a flurry of activity in the area this year, including the two most expensive sales in Vail’s history, one house for $23 million and another for $28.7 million, Mr. Blake said.
Summit County, Utah, was another ski resort hub with double-digit price growth. It ranked ninth for fastest luxury appreciation, increasing 12.2% in 2017 with an average price of $2.122 million thanks to the rising attraction of Park City and Deer Valley.
Only three primary markets were in the top 10 for luxury price appreciation. Brooklyn, New York, came in at No. 3, with average price rising 30% in 2017. Seattle and its suburbs (King County) came in at No. 8, with luxury prices rising 14%, and San Francisco’s wealthy bedroom community of Marin County came in at No. 10, as prices climbed 11.6%.
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