$100 million home sales set to double this year | Real Time Headlines

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Home sales worth $100 million are expected to double this year, a new report shows, as surging financial markets and hopes of interest rate cuts fuel a recovery in the ultra-luxury real estate market.

As of July 15, six homes in the United States had sold for more than $100 million, according to data from Miller Samuel and Douglas Elliman. If the sales pace continues, it will more than double last year’s total and could surpass 2021’s record of nine homes selling for more than $100 million.

Granted, nine-figure clubs are a small group. But sales of homes priced at $50 million, $20 million and even $10 million point to a strong rebound in the ultra-luxury real estate market after a 2023 decline. Compared.

“There’s a huge uptick in sales velocity that we simply haven’t seen in the broader housing market,” said Jonathan Miller, chief executive of appraisal and research firm Miller Samuel.

There have been two blockbuster transactions in Manhattan in about the past month. A penthouse in Central Park Tower, the world’s tallest residential tower, has sold for $115 million to an unidentified buyer. A penthouse at New York’s Aman hotel has reportedly sold for $135 million to Russian-born billionaire Vladislav Doronin, who founded the development company that built the tower. Actually purchased from own company.

Palm Beach Florida Only Private island, Tarpon IslandSold in May for $150 million, Oakley founder James Jannard just sold his Malibu mansion for $210 million, making it the most expensive home ever sold in California.

Even San Francisco is getting in on the ultra-luxury craze. Laurene Powell Jobs, the billionaire widow of Steve Jobs, just bought the most expensive house ever built in San Francisco. She spent $70 million on a 17,000-square-foot mansion in Pacific Heights, flanked by neighbor Larry Ellison on one side and Apple design guru Jony Ive on the other.

The strength of the luxury goods industry is also beginning to show. Redfin data shows that as of June, sales of homes priced at $5 million or more exceeded 4,000, a 13% increase from the same period last year.

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

According to Christie’s Mid-2024 Luxury Goods Outlook, high-end market demand across the country is strong. In Naples, Florida, sales of homes over $10 million grew 14% in the first quarter, the report said. As of early May, sales in Montana exceeded $4 million, a 50% jump, according to PureWest Christie’s International Real Estate.

Artificial intelligence craze sparks sales resurgence in San Francisco Bay Area.

“My biggest surprise so far in 2024 is how many qualified buyers are able and willing to pay top dollar for ultra-elite properties, which speaks to the tremendous liquidity at the top end of the market,” said Nathalie de Saint Andrieu, a Bay Area-based investor. broker.

The different paths of the ultra-luxury and broader property markets highlight the forces driving the high-end economy very differently from the rest of the country. The national housing market has been up and down with mortgage rates, with affordability at an all-time low and many Americans locking in their homes with low-rate mortgages. The ultra-rich can use cash to buy homes, especially if interest rates are high. This spring, two-thirds of transactions in Manhattan were cash, with the proportion even higher in the luxury sector, Miller Samuel said.

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

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

A surge in estates from an $80 trillion wealth transfer also helped sales. Daniel de la Vega, CEO of One Commercial Real Estate and president of One Sotheby’s International Realty, said he has seen a surge in South Florida among millennial and Gen Z buyers buying condos through family trusts.

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

Another trend driving ultra-luxury sales is the demand for larger homes, de la Vega said. Post-COVID, he said, wealthy buyers want all their favorite lifestyle amenities in their homes — from gyms and spas to offices, entertainment spaces and displays for art and car collections.

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

“In the past, as properties got larger, the price per square foot went down,” 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 pauses before a presidential election as buyers wait for more certainty. So far, strong financial markets have outweighed any election concerns. However, this is far from being achieved in the second half of the year.

“This election doesn’t appear to be weighing heavily on the ultra-luxury market, at least based on the action we’ve seen this year,” Miller said.

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