Demand for luxury real estate skyrocketed in June, as sales of homes valued at $1 million and up rose 25% compared to the same time last year, according to Realtor.com’s luxury home index released Thursday.
Not only did demand grow, the luxury market also became more exclusive. High-end buyers looking for new digs now have to part with an average of 4.6% more cash to enter the luxury market than they did at the same time last year, said the report, which analyzes the entry-level luxury price tier—defined as the top 5% of all residential sales—in 91 U.S. counties.
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"Continued growth in high-paying jobs and stock market inertia have reignited many luxury markets this year," said Javier Vivas, director of economic research for Realtor.com, in the report. "We’ve seen a substantial increase in buyer demand for high-end homes—even with prices and costs of ownership swiftly on the rise."
"Today, $1 million won’t get you a luxury home in most major markets," Mr. Vivas said.
In more than half of the markets analyzed, the luxury home tier currently has an entry point of at least $1 million, the report found. And 17 of the 91 luxury markets are now seeing more than 10% price growth year-over-year.
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Queens in New York City ranked third, logging rises of 15.9% for luxury property. The market is an exception, since most New York markets, though higher priced, are seeing stagnate price growth.
Prices continue to rise in the ever-hot Northern California coastal areas, too. The region is now home to four of the top 10 fastest-growing luxury markets (Santa Cruz, San Mateo, Santa Clara, and Monterey) in the country, indicating that the tech sector and strong foreign interest are pushing demand for luxury properties to new heights, the report said.