BAM Key Details:
- A recent study by Point2 identified the top million dollar markets—small, mid-sized, and large—with the highest shares of homes listed above $1 million.
- The top five large markets have the highest shares of homes listed at over $5 million. The top four of those are in California.
- Agents looking to break into the luxury real estate market need two things going for them: the market they work in and the service they provide.
Affordable homes—even those of the tear-down variety—are in short supply.
To frustrated home shoppers out there, especially those seeing their offers rejected time and time again, it might seem like all the available homes will be wearing seven-figure price tags by the time mortgage rates finally go down.
Of course, in some markets, those homes already take up a large share of available listings.
A recent study by real estate website Point2 highlighted five U.S. markets where over half the homes for sale cost over $1 million. And (brace yourself) four of those are in California.
Point2 analyzed home listings in 100 U.S. markets to identify the top 30 large, mid-sized, and small markets with the highest shares of homes costing over a cool million.
This is useful information if you’re looking to break into the luxury real estate market (at any point). The market you work in is one of the two factors you need to have working for you.
Read on to learn which cities—small, mid-sized, or large–-will tick that first box.
California takes the top four
In the top five markets, more than half of the homes for sale have list prices of over $1 million. At number one, Los Angeles has the highest share, with almost 64% of its homes listed at over $1 million.
So, it might surprise you that the median price for a Los Angeles home sold in May 2023 was under a million at $926,000.
Only two of the cities on this list had a median sale price above the $1 million mark. The median sale price for homes in San Francisco and San Jose were $1.3 million and $1.2 million, respectively.
Los Angeles has, by far, the largest share of homes priced at over $5 million, which make up almost 12% of its listings—compared to 7% of listings in San Francisco and 1% in San Jose.
Top 10 Million Dollar Markets
- Los Angeles, CA
- San Francisco, CA
- San Jose, CA
- San Diego, CA
- Boston, MA
- New York, NY
- Seattle, WA
- Denver, CO
- Washington, D.C.
- Austin, TX
Source: Point2
Luxury price points in mid-sized and small cities
The Point2 study also looked at mid-sized and small U.S. cities to identify the markets with the highest saturation of homes listed at $1 million or more. Here’s what they found:
California has the top three mid-sized markets—
- Glendale (with 66% of listings priced above $1 million)
- Huntington Beach (63%)
- Oxnard (43%)
Source: Point2
East Honolulu led the top three small markets—
- East Honolulu (with more than 70% of its listings priced above $1 million)
- Bozeman, MT (62%)
- North Bethesda, MD (55%)
Source: Point2
Breaking into the luxury market
This week on the Hot Sheet, Byron Lazine addressed the ambition many agents have of breaking into the luxury market. In a nutshell, you want two things going for you:
- A market with a large share of for-sale homes priced at $1 million or more
- Your knowledge and skills and how you develop and utilize both to provide exceptional service to your clients (giving them every reason to refer you to others)
I often hear agents say, ‘I want to crack into the high-end.’ And then you look at the town or the city or the suburb that they’re in, and there might be like 20 or 30 sales over $1 million a year. I always advise agents to be cautious in a market like that… You’re gonna be able to compete against the ‘marginal agents’ in the market that aren’t knowledgeable, that aren’t marketing, that don’t have a good game plan to put homes in the best position to sell; you can grab that market share. But if we’re talking about a small share of homes, that might not be the market to do it in. So, anybody that’s looking to be a luxury agent, these ten markets would certainly fit the bill.
