Luxury home prices rise in a dozen U.S. metros led by Florida

Luxury home prices are declining nationally but rising in a dozen U.S. metropolitan areas, led by several Florida markets. The national price threshold for a luxury home, defined as the top 10 percent of listings, was $1,197,014 in October, down 2.3 percent from a year ago, according to a monthly report from Realtor.com. The report notes this marks 31 consecutive months of annual decline at the national level. Among 43 metros studied, 12 posted a year-over-year price increase of 1 percent or higher. "Although the price point for entry luxury has had 31 consecutive months of annual decline at the national level, there are markets where prices are climbing and, in some cases, well above the year-ago levels," said the report's author, Realtor.com senior economist Anthony Smith. The South dominates the list of growing luxury markets, with five located in Florida. Only two northern metros, Atlantic City and Detroit, made the list.

Naples-Marco Island, Florida, leads the nation with a 9.0 percent annual increase in its luxury entry threshold, which now sits at $3,753,333. The North Port-Bradenton-Sarasota, Florida metro area followed with a 7.7 percent gain and a threshold of $1,796,850. Charleston-North Charleston, South Carolina ranked third with a 4.7 percent increase. In Naples, luxury properties are also selling a median of 27 days faster than last year, the fastest pace increase among all growth markets.

Luxury broker Taylor Canada of Gulf Coast International Properties, who was born and raised in Naples, said the area has transformed from having few buildings on the beach in the 1980s. "They are really trying to make it not Miami," he said of the city. "That attracts a lot of affluent buyers to the lifestyle and the quietness." Canada, who currently represents a $9 million estate in Old Naples, said certain exclusive neighborhoods are seeing records broken monthly and even the luxury condo market is showing signs of recovery. The report found that eight of the 12 growth metros saw price increases across all three luxury tiers, including the top 1 percent of listings, known as ultraluxury. The largest gain for the top 1 percent came from Charleston-North Charleston, South Carolina, where the median price for ultraluxury properties rose 18.7 percent to a threshold of $8,044,460. This contrasts with the national picture, where prices fell across all luxury tiers, with the 99th percentile down 6.2 percent to $5,125,874.

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Canada said buyers in Naples are often from more expensive states like New York, Washington, and California, but the area also sees many local buyers moving between luxury properties. "Every three to five years, they figure out where they want to go next," Canada said. He added that buyers are increasingly in their 40s with families, and they want brand-new, turnkey, and furnished properties, for which they are willing to pay a premium. Florida's tax breaks, including a newly approved property tax reform measure, are also a significant draw.

In the North Port-Bradenton-Sarasota metro, local broker Joel Schemmel of Douglas Elliman said the ultraluxury market has seen major growth. "We've really seen movement in the ultraluxury market," he said, noting that sales priced at $4 million and over are up about 80 percent since last year. Schemmel, who concentrates on the top 1 percent of properties, said buyers are lured by pristine beaches, cultural attractions, and top-notch schools. He attributed the soaring market to the end of a period when buyers were hesitant about waterfront properties due to storms. Other markets among the top 12 for entry-level luxury growth include Miami-Fort Lauderdale-West Palm Beach, Florida, up 4.1 percent, Nashville-Davidson-Murfreesboro-Franklin, Tennessee, up 3.6 percent, and Las Vegas-Henderson-North Las Vegas, Nevada, up 2.2 percent. The report noted that many of the nation's most expensive markets, like Bridgeport-Stamford-Danbury, Connecticut, and Los Angeles-Long Beach-Anaheim, California, are seeing their luxury prices slip. Of the 12 most expensive markets, only Naples posted price gains.