Luxury homes in the DMV are getting more expensive and more common. In July the percentage of homes that sold in DC for more than $1 million was 35.95% of all homes sold. The numbers in Montgomery County, Arlington and Alexandria were similar.
Percentage of Luxury Homes in the DMV Over $1M
In July 2024, the percent of homes in DC that sold over $1 million was 35.95%. In Montgomery County it was 27.4% In Arlington it was 52.67% and 27.3% in Alexandria.
In some markets, a $1 million home is considered a luxury property — but the number of places in which that still holds true is shrinking all the time. The number of homes in the U.S. with an estimated value of $1 million or more has hit a new high, with 8.5 percent of all homes hitting that value, according to data from Redfin provided to The Wall Street Journal.
Last year, the share of $1 million homes in the U.S. was 7.6 percent. Before the pandemic, it was just 4 percent.
Luxury Prices Hit New Heights Too
Sales of single-family properties across the full spectrum of the luxury market (defined as the top 10 percent of the market) were up 2.66 percent year over year, according to Coldwell Banker’s report, while attached luxury sales only increased by 0.25 percent year over year.
Luxury prices also hit new heights, with the median price for the top 10 percent of U.S. luxury homes up 37.5 percent as of June 2024 from June 2020 levels to $1.695 million, according to Coldwell Banker.
“Premium properties remain timeless, and the findings of this report demonstrate a strong commitment from both buyers and sellers to complete transactions,” Felipe Hernandez Smith, head of Compass Luxury, said in a statement. “There are exceptional homes nationwide catering to every lifestyle, and it’s encouraging to see that premium real estate is always in vogue.”
Overall, luxury agents and brokers are optimistic about how 2024 has shaped up thus far and where it seems to be heading. A few key factors agents will keep an eye on as the year continues, as brokerage midyear luxury reports suggest, include dream homebuying trends, elections, the economy, and growing and emerging markets.
What about Starter Homes in This Luxury Market?
A typical starter home costs at least $1 million in 237 cities in the U.S., a huge spike since the pandemic, according to a new report Zillow released in July.
That’s nearly three times the number from before the pandemic, when the typical starter home cost at least $1 million in 84 cities, the report found.
California accounted for nearly half of all cities on the million-dollar list, with 117 cities, followed by New York with 31 and New Jersey with 21.
“Home buyers are battling affordability and availability today. So much so that $1 million is the norm for a starter home in hundreds of cities,” said Orphe Divounguy, a senior economist at Zillow. “However, it’s looking more and more like there will be some good news ahead for first-time buyers. More homes are for sale, price cuts are on the rise, and buyers have a few more days to weigh their options as homes sit on the market.”
Starter homes are defined as those in the lowest third of home values for a given region.
The typical starter home costs $196,611 in the U.S., Zillow said. That’s up 54.1 percent over the past five years, a growth rate that exceeded the price increase for the typical home over that same span of time.
The New York metropolitan area — which includes parts of New Jersey and Pennsylvania — has more million-dollar cities than any other area, Zillow said. San Francisco was second on the list, followed by Los Angeles, San Jose, Miami and Seattle.
Those tend to be markets with more restrictive zoning codes that make it more difficult to build new housing, Zillow noted.
“Markets with the most restrictive building regulations tend to have more cities with $1 million starter homes,” Zillow said. “They are also markets with lower homeownership rates.”
Even starter homes are beginning to look like luxury homes in the DMV.
