Luxury Division at Compass: 2023 Mid-Year Ultra-Luxury Report

Following prior year-end losses and pullbacks, financial markets made a remarkable recovery. While overall ultra-luxury real estate sales were down, specific areas fared well, particularly in low-tax areas and second-home markets, where activity saw a notable uptick. Overall, $13.85 billion in ultra-luxury real estate was traded across 806 transactions during the first two quarters of 2023, underscoring the resilience of the sector and a testament that ultra-high-net-worth buyers will transact notwithstanding challenging external factors.

 

There were some especially strong regional ultra-luxury markets during the first half of 2023. New Hampshire, for instance, emerged as a burgeoning ultra-luxury destination, and Fairfield County (excluding Greenwich), Connecticut, also enjoyed multiple $10 million+ sales.

 

High-net-worth buyers are increasingly choosing low-tax and vacation destinations like Dallas-Fort Worth and Houston, both of which saw transaction totals increase 200 percent year-over-year, and Jackson Hole, which witnessed a renaissance during the pandemic and had 60 percent more ultra-luxury sales in the first two quarters of the year compared to 2022.

 

Another booming market is the Phoenix area, where buyers are increasingly drawn to its tax-friendly environment- $10 million+ sales are up 18.7 percent year-over-year. Finally, a primary driver behind ultra-luxury deals in Greater Los Angeles was the "mansion tax" deadline, which motivated buyers to act, resulting in the closure of a staggering 160 ultra-luxury deals during the first half of the year, amassing a sales volume of $3.21 billion, the most out of all markets analyzed.

 

These insights and many more are uncovered in our Mid-Year Ultra-Luxury Report, a compilation of national sales data in 2023 Q1 + Q2 for ultra-luxury sales $10 million+. The data serves as an invaluable tool for understanding the current interchange between wealth and ultra-luxury real estate, along with where, how, and at what price ultra-high-net-worth individuals choose to live, work and play. Compass is the #1 residential brokerage in the US, and the US is the primary residence for the overwhelming majority of the ultra-wealthy across the globe, making it vital for Compass to discern and support this population's demand trends and behaviors.

 

The Luxury Division and luxury agents at Compass are experts in translating economic data into insights and opportunities for our ultra-high net worth clientele. In both stable and shifting times, knowledge is crucial to successfully navigating luxury.

 

The overall rankings of the nation's top 10 ultra-luxury markets remained unchanged year-over-year, with Greater Los Angeles, Manhattan, Miami, and Palm Beach topping the list. There were some notable ranking movers outside of the top 10 markets, such as Jackson Hole rising from #27 in 2022 to #16 in 2023, doubling its total annual sales volume. Fairfield County. CT had no sales of $10 million+ in 2022 but made a big move into the top 20 for 2023

 

The data collected for this report underscores the meteoric rise in demand during Covid for luxury properties in traditional resort and second-home communities has stayed the same. Martha's Vineyard had outstanding growth in 2023, soaring 207% in total annual sales volume. Across the country, California Wine Country had an admirable increase in total annual sales volume of nearly 30%, too.

 

An exceptional example of this Covid demand phenomenon is Arizona's Scottsdale-Paradise Valley, where Compass recently launched. In the first half of 2020, Scottsdale-Paradise Valley had just one sale over $10 million. In the first half of 2023, the region had 16 ultra-luxury sales totaling $223.14 million. This is an astonishing increase of 1175%.

 

Ultra-luxury city markets experienced noteworthy gains, too, such as Greater Boston, which enjoyed a 79% increase in total sales volume year-over-year, and Greater Seattle, which saw an exceptional 116% increase in total sales volume year-over-year.