Moneyed urbanites chose to weather the coronavirus pandemic with private backyards and dual home offices in the suburbs — but millionaires are still keeping their metropolitan townhomes and luxury condominiums, according to a new report.
There were 12% fewer luxury condos and townhomes for sale in the U.S. in August compared to the same time last year — a surprising stat given that condos and townhomes are a staple of the very cities that Americans are leaving during the coronavirus pandemic, according to Coldwell Banker, which defined luxury as the top 10% of homes sold with a listing price above the 90th percentile sale price in 90 U.S. markets.
“Many of the people getting out of town want out, but they are not quite ready to let go of the city,” said Craig Hogan, vice president of luxury at Coldwell Banker, who noted that city condo owners may also be waiting until the market is more favorable in the cities to sell at a higher price.
The affluent commonly own multiple properties. Over 40% of Americans worth between $1 million and $5 million, more than half of Americans worth $5 million-$10 million, and 70% of Americans with a net worth of $10 million-plus own at least two properties, according to the study.
And they’re still buying luxury single-family houses, instead of apartments. There were 30% fewer single-family homes for sale nationwide this summer (May to August) compared to the same time in 2019, according to Coldwell Banker. Demand drove luxury single-family home prices up 6% to a median $366 per square foot in August compared to the same time last year, while luxury condo prices dropped almost 1%, according to the Institute for Luxury Home Marketing, a Dallas-based luxury real estate training and designation organization.
“In many instances, houses were selling for above the listing price with multiple competing offers,” said Hogan.
‘Larger properties on the water with access to the mountains’
Isolated luxury locations in California, Illinois, Maryland, Tennessee and Washington were among top destinations for rich buyers in 2020 — making luxury homes less available and more expensive, according to the study.
“People are deciding to move to places where there are larger properties on the water with access to the mountains,” said Lisa Turnure, broker and global luxury director at Coldwell Banker Bain in Washington.
But in most locations, nearby cities haven’t felt reciprocal damage to the luxury condo market.
Boca Raton, Fla. drew buyers with net worths of more than $10 million during the pandemic, according to the study, driving luxury single-family home inventory down 17.4% and prices up 2.4% year-over-year in the second quarter. But suburbanization didn’t unleash a glut of condos for sale onto the market in nearby Miami: there were only 1.6% more luxury condos on the market in the second quarter than at the same time last year, according to Douglas Elliman.
And in Washington state, little-known destinations like Bellevue, Kirkland, Redmond and the Seattle Islands and Inlets have drawn Americans with a net worth of over $5 million. But it’s still a seller’s market in nearby Seattle, the source of many new suburbanites, according to the Institute for Luxury Home Marketing.
“A lot of people are keeping condos in the city as secondary residences,” said Turnure.
Sarah Paynter is a reporter at Yahoo Finance.
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