Sales of ultra-luxury homes have seen a surprising surge in specific regions of the United States during the second quarter. As reported by real estate firm Knight Frank, cities like New York, Miami, and Palm Beach, Florida, experienced significant growth in the number of homes selling for $10 million or more. While Palm Beach saw a 44% increase, Miami followed closely with a 27% rise, and New York had a 16% jump in ultra-luxury home sales. The increase in sales in these cities contrasts with the decline observed in many other parts of the world.
New York retained its position as the leader in $10 million-plus sales in the U.S., with 72 homes sold, marking its highest total in two years. Miami came in second with 55 sales, followed by Los Angeles with 42, and Palm Beach with 36. However, Los Angeles experienced a 29% drop in ultra-luxury home sales due to the implementation of a new “mansion tax” charging 5.5% on homes sold for over $10 million. Notable sales in the second quarter included the $150 million purchase of Palm Beach’s only private island and the $148 million sale of a historic estate in Palm Beach.
While demand in top luxury markets is slowing from the peak observed in 2021, ultra-wealthy buyers continue to pay record prices for exclusive properties. Rising financial markets have contributed significantly to this trend, according to Knight Frank. The wealth creation has driven growth in the global super-prime sales market, with Dubai, Palm Beach, and Miami experiencing a transformation that offsets slower growth in more mature markets.
Globally, sales of $10 million-plus homes in the top luxury markets tracked by Knight Frank fell by 4% compared to the previous year, amounting to $8.5 billion. Dubai emerged as the world leader in ultra-luxury real estate, recording 85 sales in the second quarter. The city’s attraction to the ultra-rich from various regions can be attributed to its favorable tax and regulatory environment. However, London witnessed one of the most significant declines with a 47% drop in ultra-luxury home sales due to concerns about higher taxes on the wealthy in the U.K.
Although ultra-luxury buyers typically make cash purchases, falling interest rates globally are expected to support sales in the second half of the year. Knight Frank’s global head of research, Liam Bailey, predicts that lower rates will likely lead to an increase in total transaction volumes into 2025. This indicates that despite the fluctuations observed in the ultra-luxury real estate market, there may be a positive trend on the horizon for high-net-worth individuals seeking exclusive properties.
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