Economy 4 min read By Callum Montgomery
Luxury home prices fall across the US but rise in Florida as billionaires buy there
Luxury home prices have dropped year on year for 31 straight months nationally, but Florida is the main exception as wealthy buyers, including Jeff Bezos and Ken Griffin, keep spending there.
Luxury home prices have fallen year on year across most of the United States for 31 consecutive months, according to a report published on Monday. Florida is the main exception, with high-end markets there continuing to strengthen as wealthy buyers relocate and invest heavily in property.
The national picture remains weak at the top of the market. The threshold for the top 10 per cent of homes stood at $1,197,014 in October, down 2.3 per cent. The top 5 per cent threshold fell 4.1 per cent, and the top 1 per cent threshold dropped 6.2 per cent to about $5.1 million. Only 12 of the 43 metropolitan areas tracked saw luxury prices rise by at least 1 per cent, and five of those are in Florida. Outside the state, luxury markets are still unwinding the gains made during the pandemic, and the typical market was holding at 59 per cent of its peak as of May.
Several of the steepest October declines were in cities associated with the technology sector. Prices in the San Jose metropolitan area fell 12.1 per cent, those in the New York metro dropped 11.3 per cent, and San Francisco slipped 7.1 per cent. The San Francisco slump has been attributed to tech layoffs, out-migration and a shrinking pool of buyers.
Florida's luxury market has moved in the opposite direction. The Miami, Fort Lauderdale and West Palm Beach area saw its luxury threshold rise 4.1 per cent to about $2.3 million. Naples recorded a 9 per cent increase in its luxury threshold, to about $3.75 million, and its priciest listings sold a median of 27 days faster than before. The inventory of million-dollar homes in the state is also shrinking, and luxury properties are selling more quickly.
The report links this momentum to a wider migration of wealth. Florida recorded a net inflow of $137 billion in income from other states between 2019 and 2023. Drivers cited include the absence of a state income tax, lifestyle appeal and a business-friendly climate. Concern over proposed wealth taxes in California and Washington has also been cited as prompting further moves.
Several high-profile residents have made large purchases in the state. Ken Griffin moved his firm Citadel from Chicago to Miami in 2022 and paid $106.9 million for an estate in Coconut Grove. Jeff Bezos sold his Seattle mansion and spent $237 million on three properties in Indian Creek, while a company linked to him paid $69.5 million for a Golden Beach estate in September. Mark Zuckerberg and Priscilla Chan closed on a $170 million estate in Indian Creek this year, and Larry Page spent about $173.4 million on two properties in Coconut Grove. Other billionaires named in the report include Sergey Brin.
Policy may add to the pull. Florida's Amendment 3 would cut the assessment cap on second homes from 10 per cent to 5 per cent. It is not yet clear whether the price gains in Florida will persist, though inventory remains tight. For now, the state stands apart from a national luxury market that continues to cool.
Source: fortune.com
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