A view of the Central Park Tower at 217 West 57th St. in New York City.
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A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high net worth investor and consumer. Sign up to receive future editions, straight to your inbox.
Sales of $100 million homes are on track to double this year, as surging financial markets and hopes for rate cuts fuel a recovery in the ultra-luxury real estate market, according to new reports.
As of July 15, six homes in the U.S. have sold for more than $100 million, according to data from Miller Samuel and Douglas Elliman. If the sales pace continues, it would more than double last year’s total and likely eclipse the record of nine homes sold for over $100 million in 2021.
Granted, the nine-figure club is a tiny group. But sales of homes priced at $50 million, $20 million and even $10 million are all signaling a strong rebound for the ultra-luxury real estate market after its decline in 2023. The comeback marks a stark contrast with the national housing market, which is still feeling the pressure of high mortgage rates and a lack of supply.
“It’s a substantial uptick it the pace of sales, something we’re not seeing at all in the broader housing market,” said Jonathan Miller, CEO of Miller Samuel, the appraisal and research firm.
Manhattan saw two blockbuster deals in roughly the past month. A penthouse at Central Park Tower — the tallest residential building in the world — closed for $115 million to an unknown buyer. And the penthouse of the Aman New York sold for a reported $135 million to Russian-born billionaire Vladislav Doronin, who founded the development company that built the building — effectively buying it from his own company.
Palm Beach, Florida’s only private island, Tarpon Island, sold for $150 million in May, and Oakley founder James Jannard just sold his Malibu mansion for $210 million, making it the most expensive home ever sold in California.
Tarpon Isle, a private island in Palm Beach, Florida, is on sale for $218 million.
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Even San Francisco is getting in on the ultra-lux boom. Laurene Powell Jobs, the billionaire widow of Steve Jobs, just bought the most expensive home ever sold in San Francisco. She paid $70 million for a 17,000-square-foot manse in Pacific Heights, wedged between neighbor Larry Ellison on one side and Apple design guru Jony Ive on the other.
Signs of strength are also showing up further down the luxury ladder. According to Redfin, sales of homes priced at $5 million or more through June topped 4,000, up 13% compared with the same period last year.
“It was a much stronger and more robust start to the year than anyone expected,” said Mike Golden, co-founder of Chicago-based @properties and of Christie’s International Real Estate.
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According to the 2024 Mid-Year Luxury Outlook from Christie’s, high-end markets around the country are seeing strong demand. In Naples, Florida, home sales over $10 million jumped 14% in the first quarter, according to the report. In Montana, sales over $4 million surged 50% through early May, according to PureWest Christie’s International Real Estate.
The artificial intelligence boom has sparked a resurgence in sales in the San Francisco Bay area.
“My biggest surprise thus far in 2024 has been just how many qualified buyers have the capacity and willingness to pay premium prices for ultra-elite properties, which speaks to the tremendous liquidity at the highest ends of the market,” said Nathalie de Saint Andrieu, a broker in the Bay Area.
The diverging paths of ultra-luxury and the broader housing market highlight the vastly different forces driving the high-end economy from the rest of the country. The national real estate market rises and falls with mortgage rates, with affordability at all-time lows and many Americans locked in their homes with low-rate mortgages. The ultra-wealthy can use cash to buy their homes, especially when rates are high. In Manhattan, two-thirds of deals this spring were in cash, with the share even higher for the luxury segment, according to Miller Samuel.
What’s more, the confidence (and cash) of wealthy homebuyers is largely driven by the stock market, which continues to shatter records this summer. With trillions of dollars in stock wealth being created, the ultra-wealthy are now looking to buy.
“The ultra-luxury segment is almost entirely disconnected from the typical housing market,” Miller said. “It’s a more global than local market. And it’s more of a barometer for the health of global financial markets.”
The surge in inheritances from the $80 trillion Great Wealth Transfer is also helping sales. Daniel de la Vega, president of One Sotheby’s International Realty, said he’s seeing a big surge in South Florida of millennial and Gen Z buyers who are purchasing condos with family trusts.
“They want new development, and some of them are coming in and buying sight unseen,” he said. “They especially like branded residences.”
De la Vega said another trend driving up ultra-luxury sales is demand for ever-larger homes. After 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 their art and car collections.
The price per square foot for luxury condos in South Florida is up 33% this year, to $3,451. Per-square-foot prices for single-family homes are up 11% to $2,485.
“It used to be that price per square foot went down as the property got bigger,” 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 takes a pause before presidential elections, as buyers wait for more certainty. So far, strong financial markets are outweighing any election concerns. Yet that’s far from a done deal in the second half.
“At least by the actions we’re seeing this year, the election doesn’t seem to be weighing heavy on the super-luxury landscape,” Miller said.
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