Increase in Luxury Listings Fueled by Low Interest Rates


NEW YORK (MainStreet) — The housing market is on the rise again after years of depreciation since the financial collapse of 2008 and so is the demand for luxury housing, according to a new study that tracks housing opportunities of $2 million or more.

"Affluent people who made it through the recession are now able to get into zip codes they couldn't get into before at about the same price with 30-year fixed-rate jumbo mortgages at a 4.5% interest rate," said Van Davis, president of ZipRealty's brokerage operations. "That's hard to beat."

"Incredibly low interest rates are driving purchases in luxury housing markets," Davis told MainStreet.

Top Ten Cities With 20%-Plus Increases in $2M-Plus Listings

  • 1) Sacramento - 180%
  • 2) Dallas - 74%
  • 3) Houston - 53%
  • 4) Las Vegas - 40%
  • 5) Boston - 35%
  • 6) D.C./Northern Virg. - 29%
  • 7) Denver - 27%
  • 8) Westchester - 27%
  • 9) Long Island - 26%
  • 10) Orlando - 26%

Below we'll drill down into the list.

Spotlight on Sacramento

Sacramento, Las Vegas and Orlando are surprise additions to ZipRealty's 2013 top 10 list of cities with the highest percentage increase in luxury listings. The state of California holds the highest-priced real estate in the U.S. and has seen the greatest increase in average prices.


While Sacramento saw a 180% increase in luxury listings, the median sales price in California was up 34.7% from $297,000 to $400,000 since August 2012, the highest in the nation tracked by ZipRealty.

"The Sacramento housing market was hurt during the downturn because of significant foreclosures," Davis said. "But now there are enclaves in Sacramento, such as Granite Bay, which are known for the right zip codes. There's an availability of fine homes at significant prices and a bevy of neighbors that are athletes and celebrities.

International Luxury Buyers Flood Miami

Marina Palms Yacht Club & Residences located in North Miami Beach has already pre-sold 90% of the first of two towers that will someday be home to 468 condos.

"It indicates that Miami is a premier destination given its desirable sunny climate as well as its proximity to major demand centers in Latin America and the eastern seaboard," said George Helmstetter, principal of The DevStar Group.

Located on Biscayne Boulevard, the average sales price of a residence is $1 million with entry level units starting at $600,000 and penthouses listed for $4.3 million.

Although Miami didn't land on ZipRealty's top ten list of increased luxury listings, the city's home resale inventories increased by 96% since July 2013, according to data by

The demand for luxury housing in Miami is largely derived from international buyers residing in Brazil, Mexico, Argentina and other South American nations.

"They are looking for expansive units, top-of-the-line Italian cabinetry and open floor plans for family entertaining," Helmstetter told MainStreet. "Buyers are requesting that residences contain separate quarters to accommodate the help that the affluent often travel with."

Orlando Challenges Miami for Luxury Buyers

While Miami is a staple among affluent buyers, Orlando was a surprise addition to ZipRealty's top ten list of cities with the highest percentage increase in luxury listings.

"Miami is on the verge of becoming a 24-hour city while Orlando is a growing 2-tier city," Helmstetter said. "The majority of the demand in Orlando for luxury housing is domestic in nature while Miami attracts international investment and maintains its status of being a premier cultural center."

Coming in at a number 10 ranking, Orlando saw a 26% increase in luxury listings since 2012.

"While most luxury listings are near the ocean, Orlando is one of the inland markets that made the list likely because of a few newly constructed developments by Disney on Disney property in association with the Four Seasons Hotel and Golf Club," Davis said.

The Desert, Not Casinos, Attracts Luxury Buyers to Las Vegas

While Nevada is one of ten states with the lowest tax burden, Las Vegas saw a 40% increase in luxury listings.

"The money that is pouring into the desert is from Canadians and snowbirds moving in from places like Michigan," Davis said. "They're seeking a non-winter climate."

With no state capital gains tax, no state income tax and property tax based on a mere 35% of the fair market value of the property, Nevada offers retirees a jackpot of tax savings. Those over 62 years of age who also meet income limits can receive a rebate of up to 90% of their property taxes.

"The appeal of Vegas is the desert and its warm weather year-round and not so much the slot machines because rich people who live in Vegas get bored quickly of gambling," Davis said.

--Written by Juliette Fairley for MainStreet

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