Tag: UltraLuxury

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Ultra-luxury sales in newly emerged or reemerging markets helped propel 2022 sales in that sector beyond pre-pandemic levels, a report released by Compass on Wednesday shows.

Ultra-luxury sales — or the sale of homes valued at $10 million or more — totaled $29.5 billion across 1,774 transactions in 2022, the brokerage reported, representing an increase of 104.7 percent in sales volume from 2019 levels. Those sales in unexpected markets came as luxury buyers sought to diversify their portfolios with inventory still relatively tight.

Despite those figures besting 2019 levels, overall transaction volume on $10 million-plus properties in the U.S. was actually down 18.8 percent in 2022 compared to 2021.

“Lots of new wealth was created during the pandemic, and simultaneously, the ultra-wealthy reimagined their investments and living arrangements,” Compass’ report stated. “During lockdowns, they wanted everything they needed in one place and found inspiration in markets they had not considered before, creating new ultra-wealthy areas that did not exist a few years ago and inspiring a renaissance in others.”

Compass’ report identified 10 markets with no pre-pandemic ultra-luxury transactions that saw significant $10 million-plus movement in 2022: Brooklyn, New York; North Florida, Florida; Boulder, Colorado; East Bay, California; Dallas-Fort-Worth, Texas; Central Florida, Florida; Austin, Texas; Washington, D.C.; Indianapolis, Indiana; North New Jersey, New Jersey.

Brooklyn, North Florida and Boulder all saw year-over-year increases in $10 million-plus transaction volume of 300 percent or more. Brooklyn saw the greatest surge in ultra-luxury sales, with just three such transactions in 2021 and then 13 in 2022. Austin, Central Florida, Dallas-Fort-Worth and California’s East Bay all also saw substantial increases in ultra-luxury sales, ranging from surges of 25 to 100 percent year over year.

Well-established luxury markets also outperformed 2019 levels in 2022, with Telluride, Colorado, and Palm Springs, California, showing standout growth in transaction volume, increasing 600 percent from 2019. From 2021 to 2022 alone, Palm Springs’ sales volume rose 117.6 percent year over year, hitting $207.4 million.

“People from across the globe are purchasing luxury estates to enjoy the lifestyle our desert offers,” Valery Neuman, a Compass agent in Palm Springs, said in a statement. “No longer dubbed as the retirement mecca, buyers are younger and taking advantage of all its amenities, including golf, pickleball, tennis, concerts, fine dining, fine arts and a small airport with private jet access.”

Manhattan saw the greatest number of ultra-luxury sales in 2022, closing more than $6 billion in sales volume across 343 transactions. Those ultra-luxury deals were front-loaded during the first half of 2022, with nine out of the top 10 sales of the year occurring during the first six months of 2022, prior to the market correction that settled in following the Fed’s series of mortgage rate increases.

“While the $10 million-plus market in Manhattan slowed notably between July and October, contract activity rose in November and December, especially in the $20 million-plus market, evidence that the ultra-wealthy who seize opportunities in volatile times usually end up winning in the long term,” Tony Sargent, an agent with Compass in New York, said in a statement. “We saw this in 2009 as well as in 2018-2020.”

As far as what this all may mean for 2023, Compass agents expect a lot of the strong ultra-luxury momentum from 2022 in these markets to continue in the new year.

“We are still seeing an unprecedented level of relocations to Florida from high tax states,” Liz Hogan, a Compass agent in Miami, said in a statement.

Contract activity from Q4 2022 also offers a glimpse ahead at 2023. In Manhattan, specifically, 44 contracts were signed on homes priced over $10 million, with an average contract price of $18.3 million. Those figures represent about one-third of the number of contracts signed during Q4 2021, but about $2 million more than the average contract price during Q4 2021 of $16.6 million.

For the most part, however, Compass agents said that luxury buyers tend to remain a stable presence in the market, despite the economic environment.

“Luxury never goes away,” Compass-Greenwich Agent Shelly Tretter Lynch said.

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Email Lillian Dickerson