Sales of $100 million homes are set to double this year

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Sales of $100 million homes are set to double this year as rising financial markets and hopes of interest rate cuts fuel a recovery in the luxury real estate market, according to new reports.

Since July 15, six U.S. homes have sold for more than $100 million, according to data from Miller Samuel and Douglas Elliman. If the pace of sales continues, it will more than double last year’s total and likely eclipse the record of nine homes sold for over $100 million in 2021.

Admittedly, the nine-figure club is a tiny group. However, sales of homes priced at $50 million, $20 million and even $10 million mark a strong rebound for the luxury real estate market after a slump in 2023. The rebound marks a stark contrast to the national housing market, which is still feeling the pressure of high mortgage rates and a lack of supply.

“It’s a significant increase in the pace of sales, something we’re not seeing at all in the broader housing market,” said Jonathan Miller, CEO of Miller Samuel, the appraisal and research firm.

Manhattan has seen two blockbuster deals in the past month or so. A penthouse at Central Park Tower — the world’s tallest residential building — closed for $115 million to an undisclosed buyer. And the Aman New York penthouse was sold for $135 million to Russian-born billionaire Vladislav Doronin, who founded the development company that built the building — essentially buying it from his own company.

Palm Beach, Florida’s only private island, Tarpon Island, sold for $150 million in May, and Oakley founder James Jannard just sold his Malibu mansion for $210 million, making it the most expensive home ever sold never in California.

Even San Francisco is getting in on the luxury boom. Laurene Powell Jobs, the billionaire widow of Steve Jobs, just bought the most expensive home ever sold in San Francisco. He paid $70 million for a 17,000-square-foot home in Pacific Heights, wedged between neighbor Larry Ellison on one side and Apple design guru Jony Ive on the other.

Signs of strength are also seen further down the luxury ladder. According to Redfin, sales of homes priced at $5 million or more through June topped 4,000, up 13% compared to the same period last year.

“It’s been a much stronger and stronger start to the year than anyone expected,” said Mike Golden, co-founder of Chicago-based @properties and Christie’s International Real Estate.

According to Christie’s Mid-Year Luxury Outlook 2024, high-end markets across the country are in high demand. In Naples, Fla., sales of homes over $10 million rose 14 percent in the first quarter, according to the report. In Montana, sales over $4 million were up 50 percent through early May, according to PureWest Christie’s International Real Estate.

The AI ​​boom has sparked a sales resurgence in the San Francisco Bay Area.

“My biggest surprise so far in 2024 has been how many qualified buyers are able and willing to pay premium prices for ultra-elite properties, which shows the huge liquidity at the higher end of the market,” said Nathalie de Saint Andrieu. , Bay Area Realtor.

The divergent paths of ultra-luxury and the broader housing market underscore the very different forces driving the high-end economy from the rest of the country. The national housing market rises and falls with mortgage rates, with affordability at an all-time low and many Americans locked into their homes with low-interest mortgages. The super rich can use cash to buy their homes, especially when prices are high. In Manhattan, two-thirds of deals this spring were in cash, with the share even higher for the luxury segment, according to Miller Samuel.

Additionally, the confidence (and cash) of wealthy homebuyers is largely driven by the stock market, which continues to break records this summer. With trillions of dollars in equity wealth being created, the ultra-rich are now looking to buy.

“The ultra-luxury segment is almost entirely disconnected from the typical housing market,” Miller said. “It’s a more global than local market. And it’s more of a barometer for the health of global financial markets.”

The increase in inheritances from the $80 trillion Great Wealth Transfer is also helping sales. Daniel de la Vega, president of One Sotheby’s International Realty, said he is seeing a big increase in South Florida of millennial and Gen Z buyers purchasing condos with family trusts.

“They want new development and some of them are coming in and buying sight unseen,” he said. “They particularly like branded residences.”

De la Vega said another trend driving ultra-luxury sales is the demand for ever-larger homes. Post-Covid, he said, wealthy buyers want all their favorite lifestyle amenities in their homes – from gyms and spas to offices, entertainment venues and showrooms for their art and car collections.

The price per square foot for luxury condos in South Florida rose 33% this year, to $3,451. Prices per square foot for single-family homes are up 11% to $2,485.

“It used to be that price per square foot goes down as the property gets bigger,” de la Vega said. “Now it’s the opposite. We’ve never seen numbers like this. It’s astronomical.”

Typically, the high-end real estate market stalls before a presidential election as buyers wait for more certainty. So far, strong financial markets have outweighed electoral concerns. However, this is far from the end of the second half.

“At least with the actions we’re seeing this year, the election doesn’t seem to weigh on the ultra-luxury landscape,” Miller said.

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