This Is the Hottest Luxury Home Market in America

By Douglas A. McIntyre Published Feb 28, 9:30AM EST

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This Is the Hottest Luxury Home Market in America — © Getty Images

It is hard to imagine a hotter residential home market than the one in the United States right now. The frenzy of activity has gone on for two years. January data proves the rise will not end in the near future.

Some markets have drawn so many buyers that home prices in them have soared over 50% in the past several quarters. The median home price in America sits at a record $350,000. The figure could move closer to $400,000 by year’s end.

Among the reasons for the jump is that people want to move from the most expensive markets, particularly those on the coasts. Home prices have reached two to three times the national median in New York and San Francisco. Prices in smaller inland cities run well below those levels. And the overall cost of living outside these cities attracts people who want their dollars to go further.

Low mortgage rates (which have started to rise) also have encouraged buyers. Mortgage activity reached an amazing level as home prices have risen.
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Finally, the COVID-19 pandemic triggered a shuttering of business offices. Some people have been told they will not need to return to do their offices. This has created an unusual chance for mobility for millions of Americans.

America has always had rich enclaves, and they continue to be the locations of expensive homes. Often these have become vacation destinations. Others are suburbs of large cities. Still, others are large cities that have had tremendous influxes of populations, in particular ones where buyers are well educated and have high incomes.

According to Realtor.com’s just-released Living the Dream: Here Are the Hottest Luxury Real Estate Markets in America Right Now report, the top 1% of homes for sale nationwide have a median listing price of $5.5 million in January. Frank Nothaft, the chief economist at CoreLogic, pointed out that “Those who have been very successful, who kept their jobs, and [who] saw the stock market go through the roof cashed out their gains to use that as their down payments to buy a second home.” The study looked at the top 1% of homes based on price in large metro areas.

The top market based on this measure is Kahului, Hawaii. The top 1% of homes based on price have a median value of $23.9 million.

Here are the top 10 markets and the median value of the top 1% of homes there:

Kahului, Hawaii ($23.9 million)
San Luis Obispo, Calif. ($40.0 million)
Sebastian, Fla. ($6.2 million)
Hilton Head, S.C. ($5.5 million)
Wilmington, N.C. ($3.8 million)
Barnstable, Mass. ($15.9 million)
Austin, Texas ($5.0 million)
Portland, Me. ($4.9 million)
Salt Lake City, Utah ($4.2 million)
Prescott, Ariz. ($5.7 million)

Click here to see which city has the most expensive houses in each state.
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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.