Luxury home purchases have spiked almost twice as fast as mid-priced houses as wealthy buyers snap up properties in cities like San Francisco and Miami
- Luxury home purchases are soaring compared to the same period last year, according to Redfin.
- High-end home purchases climbed 26% during the three months ending April 30.
- San Francisco is the top market, but the rich are also buying in the Southwest and mountain regions.
- See more stories on Insider’s business page.
Purchases of luxury homes are surging as the residential real estate market continues to see feverish momentum in 2021.
According to a new report from Redfin, high-end home purchases climbed 26% during the three months ending April 30, compared to the same period last year. The increase surpasses that of mid-priced homes and affordable homes, which saw an increase of about 15% and 18%, respectively.
The spike surpasses even pre-pandemic levels, according Redfin’s data.
The luxury home boom is the result of a combination of factors, according to Redfin: a strong stock market that has benefitted wealthy Americans, savings growing during the pandemic, and the ability to work remotely. At the same time, lower-income homebuyers are increasingly unable to afford homes as prices continue to skyrocket.
Redfin also noted that there are a surplus of expensive homes coming on the market right now, which means there are more options for well-off homebuyers.
Read more: Unmoored by remote work, the wealthy streamed into 6 under-the-radar cities and towns during the pandemic
So where are wealthy Americans buying? San Francisco saw an 82.4% increase in luxury home sales during the three months ending on April 30, Redfin reports, followed by Oakland, Miami, San Jose, and Las Vegas.
But many buyers are also looking outside of coastal hubs. The rich have relocated to suburbs like Fairfax County, Virginia, and Colorado Springs, outside of Denver; they flocked to ski towns like Vail and Telluride; and they snapped up homes in vacation hot spots like Palm Beach County, Florida.
And some wealthy buyers, freed from a standard commute to an office in New York or San Francisco, have opted to invest in “hidden gem” cities, areas where the real estate market is growing but hasn’t yet reached a fever pitch. Those cities, mostly in the Southwest and mountain regions of the US, are seeing significant investment from those who left California and the East Coast during the pandemic — a recent report from Coldwell Banker found that cities like Phoenix, Denver, and Dallas are all on the rise.
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