Luxury Markets Rebound in Some Very Unexpected Cities
Luxury Markets Rebound in Some Very Unexpected Cities
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Much has been made of the white-hot, luxury real estate markets of international cities like New York, London, and Dubai. But did you know about the real estate porn-worthy properties lying beyond the world’s most glamorous cities … in places like Jackson Hole, WY; Atlanta; and Detroit?
Jupiter Island, FL, was crowned the top U.S. market seeing the biggest year-over-year jump in the number of luxury sales in 2015, at 52%, according to a recent Christie’s International Real Estate study titled “Luxury Defined.”
The report looked at the world’s “comeback” markets, where sales of high-end properties began to rebound last year from the dark days of the recession. A luxury property was defined as having a sale price of at least $1 million, although the threshold was higher in certain markets.
Valencia, Spain, and Auckland, New Zealand, occupied the first and second slots internationally, with an 89% and 63% annual bump in sales, according to the report.
On Jupiter Island, which came in third, sales of $3 million-plus properties were up partly as a result of the limited number of homes on the market, say real estate professionals. Golf phenom Tiger Woods reportedly has a home on the barrier island.
“As soon as these luxury properties are listed, they go very quickly under contract,” says Realtor® Mary Jane “MJ” McElwaney of Golden Bear Realty, based in nearby Palm Beach, FL. “People with discretionary income [want] to diversify their portfolios.”
High-end sales have been flat on Jupiter Island for the past few years, then rebounded as the stock market improved. Purchases of $2 million and $3 million homes and oceanfront condos have since tapered off a bit as the stock market has gone topsy-turvy again.
“Folks like the privacy” of the island, says McElwaney. “It’s very secluded, yet it’s convenient to the Palm Beach airport, world-class golf, tremendous restaurants, and shopping.”
Next up on the domestic list was Jackson Hole, WY, which saw a 45% rise in sales of $3 million-plus properties in 2015, according to the report.
That’s due to an influx of “30-something, dot-com sensations” moving into the market, attracted by the skiing and luxe life, says Monique Sofo, the primary author of the Christie’s report. Many of them live in the winter destination and telecommute to their high-powered jobs elsewhere, she says.
The market was followed by Portland, OR, where prices have been spiking as more people move into the quirky city. Purchases of luxury properties of $1 million and more were up 40% over the previous year.
It was followed by San Antonio, TX, at 31%; Orlando, FL, at 27%; Charleston, SC, at 27%; and Atlanta, at 25%.
Longtime Atlanta real estate broker Dac Carver, of Beacham & Co. Realtors, attributes the high-end sales of $1 million-plus properties to more companies—and their well-paid executives—moving to the city, as well as prices on these properties taking a bit of a dip.
For example, in the first three-and-a-half months of the year, prices fell 1.6% compared with a year earlier on homes in the $1 million-plus range, he says. Yet, sales of those properties jumped 26%.
He doesn’t think the bump has much to do with the Southern city’s burgeoning film industry. Most of the movie stars only rent fancy homes while they’re filming and then move back to wherever they’re from when the project wraps, he says.
“Anybody who buys big houses in general are people who are here for business,” Carver says. “There are [also] a lot more newly constructed homes in the $1 million to $1.5 million range.”
Rounding out the top 10 rebounding luxury markets in the U.S. were Palos Verdes, CA, south of Los Angeles, where sales rose 24% year over year; San Luis Obispo, CA, between Los Angeles and San Francisco, at 23%; and Central New Jersey, at 23%.
Detroit came in 12th with sales of properties of $1 million or more rising 17%. Yes, Detroit. The onetime automotive powerhouse, then hard-luck story, has been experiencing a resurgence of sorts, due to an improving local auto industry, an uptick in entrepreneurs setting up shop, and a revitalized downtown.
“Prices are rising, and there’s more of a demand” for high-end homes, says Justen Alias of Real Estate One, based in the Detroit suburb of West Bloomfield, MI. “Compared to other luxury markets, you get a lot more for your money here.”
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