Real Estate
The typical luxury home today commands an average cost tag of around $1.8 million nationwide — but in Boston, that figure is far higher.
Boston’s high-end housing market just reached a new milestone: the typical luxury home worth in the city surpassed $3 million, according to new data from Zillow. That ranks Boston eighth among the country’s most competitive metro areas for luxury property values.
The typical luxury home, defined as the leading 5% of home values in a given area, today commands an average cost tag of around $1.8 million nationwide — but in Boston and other competitive metro areas, that figure is far higher.
San Jose tops the list in terms of ultra-high-end home values at $5.9 million, followed by Los Angeles ($5.1 million) and San Francisco ($4.8 million). Boston’s luxury home worth is on par with other coastal cities like Seattle ($3.2 million) and New York ($3.9 million).
On the lower end, Buffalo’s luxury properties average just above $835,000.
Over the past year, luxury home values have increased 2.7% – nearly double the 1.4% growth in the broader housing market.
“Despite a slower market, home prices have continued to climb — a promising sign for sellers considering listing their properties,” Zillow Senior Economist Orphe Divounguy said in a release. “Luxury home values, in particular, have remained resilient, even as both buyers and sellers took a more cautious approach after the April stock market volatility.”
For Bridget Fortunate, an agent at Elevated Residential, a luxury real estate agency in Boston, the $3 million figure was “a little bit shocking,” she told Boston.com in an interview.
“I would say the biggest market is between that $1 to $2 million [range],” she said. “That’s where we’re really hurting right today, because we have super low inventory.”
Even with the shortage, Boston’s luxury home values rose 5.1% year-over-year, according to the Zillow report. Fortunate attributed the increase to steady demand coupled with pricing power.
“Our demand, I believe, is still firmly increasing. When you don’t have the inventory, the prices are going to increase, because people can,” she said.
Even with a low inventory, she believes it’s a great time for buyers in Boston’s luxury home market.
“Yes, rates are higher, but if you are in the position where you can grab right today, it’s a really great time to get a discount. And that’s where I’ve had a lot of luck with my personal buyers,” she said.
Midwest metro areas have been stealing the spotlight for the strongest luxury home worth growth, including Cincinnati (7.3%), Columbus (6.8%), Chicago (6.3%), and Cleveland (6.1%) with Las Vegas also showing a 6.1% gain. In contrast, luxury prices declined in Sun Belt cities Austin (-2.1%), Tampa (-1.7%), and Miami (-0.5%).
While luxury homes still come at a premium, the gap between luxury home prices and mid-market properties has narrowed since 2020, from 5.5 times higher to about 5 times higher today.
Read the full report here.
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