Who doesn’t want a home that features a touch of luxury here and there? America’s homebuyers certainly do! After a solid decade of exposure to how the other half lives-thanks to numerous online sites and reality TV shows, U.S. house hunters clamor for listings that boast “upscale extras.”
Christie’s International defines the “luxury home market” in broad terms as one that “connotes quality, refinement and exclusivity.” Price wise, worldwide, properties within the luxury sector range from $750,000 to over $2 million. Considering the number of millionaires who call the Lone Star State home, it should come as no big surprise that the luxury real estate market in Texas is booming!
News from Phoenix Marketing International revealed that the quiet hill country town of Fredericksburg has the state’s highest percentage of millionaires. Among the town’s nearly 11,000 residents, over 700 households have more than $1 million in assets. As 75-year old native Robert Waller has observed, “Money likes peace and quiet.” Elsewhere in the state, nearby Kerrville comes in at second with millionaires making up nearly 6 percent of the area’s population. Midland ranked number 7, Austin-Round Rock at number 8, Brenham at number 9 and Dallas-Fort Worth-Arlington brought up the bottom at the tenth slot.
The Texas Association of Realtors or TAR, reports that in 2015 the volume of luxury home sales grew from 4.5 percent to 36.4 percent. That increase was for properties that sold for over $1 million or more and was recorded in the state’s four major markets: Houston, Dallas-Ft. Worth, Austin and San Antonio. TAR’s chairman, Leslie Rouda Smith, explains that the state’s rapid economic growth continues to drive the demand for upscale, luxury properties. Smith notes that the market sector within the $1 to $1.5 million range has been especially strong and that there are numerous neighborhoods where the lot alone is well worth $1 million and up.
Please do not assume that all of these homes fall into the executive estate or McMansion category. TAR’s findings show that the current wave of buyers within this market are opting for smaller custom homes on smaller lots in hot areas such as Austin and Ft. Worth. Upscale amenities also rank high on the list of must-haves for this group of buyers.
Jim Gaines, Ph.D. who is an economist with Texas A&M University’s Real Estate Center observes: “Rising land and development costs are changing what today’s luxury market looks like, and many developers are now entering the high-end custom homebuilding market due to more expensive lot costs. Rising home prices across the state are also pushing more higher-end homes into the luxury market.” Gaines went on to explain that many homes that were priced in the $800,000 to $900,000 range a few years ago, often sell today for more than a million.
If you are looking to finance a higher end home in Texas, please contact us to discuss our various jumbo loan and conventional financing solutions. We offer both fixed rate and adjustable rate programs to meet the needs of most home buyers.
Because of rising land prices, many Texas homebuyers are purchasing older homes in prime locations and demolishing them in order to rebuild a custom design. This may sound absurd, however considering the TAR’s findings that the price-per-square-foot for luxury homes is typically double or triple that of the average for single-family homes, it makes sense!
Here’s a market-by-market look at 2015’s luxury home sales stats taken from the four largest metro areas:
- Houston saw a leap in this sales category, especially from January through October. Luxury sales topped out at 1,284, which represented a 4.5 percent increase in the y-o-y view.
- In Austin, over 2 percent of last year’s home sales fell into the category of $1 million+. That signifies a jump of 16.3 percent from 2014. Austin’s luxury home median price stood at $1,382,252.
- The Dallas-Ft. Worth area saw the sale of 1,088 upscale properties. That market grew by 12.4 percent over the course of 2015. The median price for luxury homes in Dallas rang in at $1,400,000.
- San Antonio’s million-dollar property market saw a healthy increase of 36.4 percent in the y-o-y analysis. TAR reports that among the state’s four high dollar markets, San Antonio is where the deals can be found where luxury properties have a median price of $1,298,375.