Real estate prices have been rising across the United States rapidly since the initial freezing of the market at the start of the pandemic. Just about every major metropolitan city in the US has seen prices surge, with not just primary markets benefitting. From Florida and Texas to Arizona and Utah, prices skyrocketed. Low-interest rates combined with a large degree of buyer interest and low inventory to drive prices through the roof, but this wasn’t limited to the average residential homes. Ultra-luxury real estate also surged throughout 2021.
Ultra-luxury real estate is defined as homes priced at $10 million or more. These are the priciest houses on the market, the type of homes reserved only for the wealthiest in the country. Typically, there have been very few markets where these transactions are normal. Places like San Francisco, Los Angeles, and New York City often have high sales volumes of homes that reach these prices, but most other places will not have many $10 million transactions per year.
However, in 2021, the traditional markets had massive, record-setting sales volume in the ultra-luxury markets, while other secondary markets also shattered records and saw prices skyrocket. This shows that the ultra-luxury market is incredibly strong right now. Let’s dive into some of the astonishing statistics with help from data from Compass’ first-ever Ultra-Luxury Report that covers 30 markets from across the country.
Firstly, let’s look at how the transaction trends played out across the 30 US markets surveyed for the report. The numbers are jaw-dropping. Collectively, there were over 2,300 residential properties sold at or over $10 million in 2021 across the 30 markets profiled. This was an increase of 111.6% over 2020, a massive surge that can’t be ignored. There were several leaders in the ultra-luxury sales markets. Many were the usual suspects, but other regions’ growth is a big reason for this high overall number.
The market with the most ultra-luxury sales will come as no surprise. The Greater Los Angeles area saw 628 residential sales at $10 million and above, totaling $10.6 billion in transaction volume. Los Angeles has long been a haven for the rich and famous, but even these numbers are dramatic. They marked a 90.3% increase in transaction volume and a 97.5% increase in sales volume.
The market with the second-highest number of total transactions was Manhattan. Real estate has always been pricy in New York City, and Manhattan is the epicenter of that. Manhattan had 326 residential sales for $10 million or more in 2021, a 91% increase from 2020. The sales volume of $6.3 billion in ultra-luxury residential sales was an 84% increase from the 2020 numbers.
New York and Los Angeles are expected to be on a list like this, but other emerging markets also had years to remember. Austin has long been an emerging real estate market, with a status as a growing hub for the tech industry fueling a major economic rise. In 2021, Austin had 11 residential sales at $10 million or more. This pales in comparison to Los Angeles and Manhattan, but it marked a 450% increase in transaction volume, and the $189 million in sales volume was a 562.3% increase from 2020.
The other area with a surge in the ultra-luxury market was Suburban Long Island, excluding the Hamptons. This area had five ultra-luxury sales, totaling $101 million in sales volume. This was a 400% increase in transactions and an 853.9% increase in sales volume.
Austin and Suburban Long Island were the two markets with the largest growth percentage in the transaction and sales volume, but other regions across the country were on the rise. Florida areas like Palm Beach, Miami Beach, and Naples were huge beneficiaries of the increase in ultra-luxury real estate spending.
Very few regions in the United States saw their ultra-luxury transactions decrease or not grow this year. Buyers are more willing than ever before to take the leap and purchase luxurious homes. With work-from-home likely here to stay, buyers were willing to spend big in some less traditional markets, even as Los Angeles and Manhattan saw their sales figures trend upwards. Looking ahead to the rest of 2022, this trend of ultra-luxury buying isn’t likely to decrease. Low-interest rates, high buyer demand, and low supply have changed the market conditions dramatically, and none of these root causes seem certain to shift.
