New Development Activity Played a Pivotal Role in Boston’s 200% Jump in Real Estate Transactions Above $10 Million

0
153
New Development Activity Played a Pivotal Role in Boston’s 200% Jump in Real Estate Transactions Above $10 Million

Winthrop Center, Boston

NEW YORK – New development activity played a critical role in the city of Boston’s 200% increase in real estate transactions to more than $10 million compared to last year compass.

Compass, the largest residential real estate brokerage by sales volume in the United States, released its third annual year-end Ultra-Luxury Report examining residential transactions and sales volumes of $10 million and above in 79 U.S. markets in 2023.

In a year in which overall ultra-luxury sales fell 15.26%, 1,560 homes priced at $10 million and up traded for $26.84 billion, with Manhattan leading the way and 23 markets recorded annual sales growth.

“The results of this report are a testament to the compelling strength of the ultra-luxury sector, even in the face of headwinds,” said Felipe Hernandez Smith, Head of Compass Luxury. “The continued enthusiasm for ultra-luxury real estate underscores the enduring value of exceptional properties.”

Rankings

Manhattan led all U.S. ultra-luxury markets with $4.92 billion in sales across 256 business parks, followed by Greater Los Angeles, Miami Dade and Palm Beach County.

“Amid remarkable macroeconomic changes, the Manhattan ultra-luxury market has experienced remarkable resilience over the past year,” said Stephen Ferrara of the Hudson Advisory Team at Compass New York, predicting “further robust performance in 2024.”

While sales in Manhattan declined over the year, they proved comparable to 2019 levels. On the other side of the coast, however, the Los Angeles metropolitan area exceeded pre-pandemic sales levels, even amid challenges such as the implementation of a new 5.5% transfer tax on home sales over $10 million.

“The most architecturally significant homes received increased and sustained attention,” said Sally Forster Jones of the Sally Forster Jones Group at Compass Los Angeles. “When these special properties came on the luxury market, sensible buyers were eager to purchase them and were not afraid to pay the price.”

Looking ahead to 2024, new luxury condo listings could further boost sales in the Los Angeles area, according to Justin D’Adamo, principal of Compass New Development. “The ultra-luxury buyer in Los Angeles is no longer just looking for a sprawling single-family home in the hills. Instead, many buyers want similar size, finish and quality in a condominium where privacy and impeccable service are paramount. New offerings on the market, such as Rosewood Residences Beverly Hills, are attractive to this buyer and are fueling the new wave of high-end transactions.”

Top 20 markets ranked through 2023 with transactions totaling over $10 million

market

2023 transactions

YOY % change

1.

Manhattan, New York

256

-25.36

2.

Greater Los Angeles area

231

-4.94

3.

Miami Dade, FL

118

-22.88%

4.

Palm Beach County, Florida

91

-15.74

5.

Orange County, Florida

81

-20%

6.

The Hamptons, NY

73

-34.23%

7.

Silicon Valley and Peninsula, California

71

-6.58%

8th.

Aspen, CO

66

-2.94

9.

Big Island, Kauai, Oahu, Maui, HI

46

-28.12%

10.

San Diego, California

43

13.15%

11.

Southwest Florida

41

-46.05%

12.

Santa Barbara & Montecito, CA

34

-25.53%

13.

Greater Palm Springs, California

30

114.29%

14.

Scottsdale, Paradise Valley and Phoenix, AZ

27

22.73%

15.

Jackson Hole, Wyoming

22

83.33%

16.

Broward County, Florida

22

-12%

17.

City of Boston, MA

21

200%

18.

Greater Seattle, WA

20

0%

19.

Vail & Beaver Creek, CO

19

-17.39%

20.

Carmel, Monterey, Pebble Beach and Santa Cruz

16

-50

23 markets report annual growth

Last year, 23 markets exceeded 2022 transaction numbers and 28 markets recorded higher sales volumes. Emerging markets include the city of Boston, MA; Palm Springs, California; Jackson Hole, Wyo.; San Diego, California, and the Phoenix area. These markets showcased unique homes, desirable amenities and attractions that appealed to high net worth individuals from around the world.

Traditionally known for its historic homes, Boston is currently experiencing an ultra-luxury renaissance with high-profile listings for new luxury high-rises.

“These properties are often associated with five-star hotels and offer world-class amenities, concierge services and multi-million dollar views,” said Penney Gould, an agent with Compass Boston. “Buyers of this caliber are attracted to services that alleviate some of the inconveniences traditionally associated with living in a historic city, such as valet parking, dry cleaning pickup and on-site restaurants with world-class design and renowned chefs. Ultimately, these properties offer residents suburban convenience at a cosmopolitan address.”

Valery Neuman, an agent with Compass Palm Springs, highlighted Palm Springs’ thriving luxury market, saying, “The private clubs are particularly sought after because of the exclusive lifestyle they offer.” Many buyers are also looking to update older properties and add their desert oasis add a personal touch.”

Jackson Hole, known for its stunning scenery and low taxes, emerged as another emerging market. Breezy Mulligan, an agent with Compass Jackson Hole, noted, “In our market, buyer preferences lack consistency beyond a shared emphasis on scenic views and privacy.”

With 43 sales over $10 million, San Diego was the market with the highest transaction volume, surpassing last year’s sales with a 13.15% increase as ideal weather, world-class golf communities and robust biotechnology and research industries continue to attract major backers.

Finally, the Paradise Valley sales in Arizona push the ultra-luxury market in the Phoenix area to new heights. “The local luxury market is thriving as a seller’s market thanks to continued demand from cash buyers and the industry’s growth bringing C-level executives and entrepreneurs into the market,” said Chris Karas, an agent with Compass Arizona.

Growth markets in 2023 ranked by percentage increase year-on-year

market

2023 transactions

Transactions 2022

YOY % increase

1.

City of Boston, MA

21

7

200%

2.

Greater Palm Springs, California

30

14

114.29%

3.

Dallas, TX

8th

4

100%

4.

Greater Boston, MA

6

3

100%

5.

Steamboat Springs, MA

4

2

100%

6.

Boulder, CO

4

2

100%

7.

New Hampshire

4

2

100%

8th.

Denver, CO

2

1

100%

9.

Greater Minneapolis

2

1

100%

10.

Jackson Hole, Wyoming

22

12

83.33%

11.

Sun Valley, ID

7

4

75%

12.

Houston

7

4

75%

13.

Westchester County, NY

5

3

66.67%

14.

Long Island, NY

3

2

50%

15.

Coast, Rhode Island

3

2

50%

16.

Greenwich, CT

13

9

44.44%

17.

Martha’s Vineyard, MA

7

5

40%

18.

Fairfield County, CT

4

3

33.33%

19.

Washington, D.C

4

3

33.33%

20.

North Florida

5

4

25%

21.

Scottsdale, Paradise Valley and Phoenix

27

22

22.73%

22.

Snowmass Village, CO

7

6

17%

23.

San Diego, California

43

38

13.15%

As we reflect on the findings from the third annual Ultra-Luxury Report, the resilience shown by the ultra-luxury real estate sector in 2023 sets a promising tone for the year ahead, with expectations to continue growth and robust performance in 2024.

Advertising