Austin breaks into ranking for top luxury home markets; younger millionaires impacting the data
Austin historically hasn’t been known as a hotbed for luxury home sales relative to the rest of the country, but that might be changing. Coldwell Banker Previews International released its Luxury Market Report 2014 Edition II Thursday and Austin cracked the Top 20 for number of home sales valued at more than $1 million.
The Austin Business Journal has been tracking the luxury residential home market closely during the past year, computing which ZIP codes have the highest home values, what listings are the most expensive in the market and who the agents are that are vying for market share in the luxury housing market. Even Concierge Auction, a New York-based auction house specializing in creme de la creme properties, moved a large segment of its operations to Austin earlier this year to tap in the lucrative market.
Austin’s appeal to young, successful entrepreneurs may be driving up the velocity of luxury home sales here.
Based on Coldwell-Banker’s interviews with 506 ultra-wealthy individuals, certain trends are emerging. Younger millionaires, which Austin is breeding in greater numbers, are spending more than older millionaires for their homes. For example, those under 35 who were surveyed spent an average of $7.8 million for their last home. Buyers between 35 and 44 spent $6.8 million and those between 45 and 64 spent $2.7 million. Wealthy individuals 65 and older played it safe, spending on average a cool $1 million.
Younger wealthy buyers tend to buy for lifestyle rather than location — another factor that favors Austin with its young, vibrant demographic. The Internet and travel options allow them more latitude in where they choose to live. They tend to want the instant gratification of a turnkey property, and social media impacts their housing decisions. Younger buyers also support green housing with one-third of the under 45 group demanding eco-friendly options.
So where are the greatest concentration of luxury home sales?
California has four of the top 10 markets: San Francisco, Los Angeles, San Jose and San Diego. Houston makes a very respectable showing at No. 5 with 981 home sales valued at more than $1 million. Dallas lands at No. 11 with 722 home sales and Austin rounds out the ranking at No. 20 with 506 transactions.
When it comes to home sales valued at more than $5 million, only Dallas remains in the ranking at No. 18. New York City tops that list, as well as the ranking for home sales valued at more than $10 million.
Coldwell Banker breaks down the data by ZIP codes as well. In each of the price categories, California neighborhoods dominate, though the Aspen ZIP Code of 81611 logs in with the second most sales of properties valued in excess of $5 million.
The inventory of million dollar homes available for purchase presents a greater geographic diversity. Though many listings also are in California, Florida and New York present plenty of choices. In fact, the greatest number of listings valued at more than $1 million are found in ZIP code 10021 — the upper east side of Manhattan.
Jan Buchholz, Austin Business Journal, 10/2/14