3 U.S. Markets Where Luxury Home Investment Still Have Value
Boston’s luxury housing market has so far defied many of the economic shifts hitting its counterparts around the Northeast and Mid-Atlantic, as roaring demand and very limited housing stock keep the wind in Beantown’s sails.
Many coastal housing markets in high-tax states took a hit this year as affluent residents felt the effect of federal tax reform enacted in 2018 and removed key tax deductions that for some families were expected to amount to tens of thousands of dollars, Mansion Global has previously reported. Taxes combined with other uncertainties have created a climate where trophy properties, from New York City penthouses to Los Angeles spec homes, have amassed and languished unsold for months or years.
“Sometimes people hear what’s going on in distant cities and that makes them nervous,” said Nicole Rideout, vice president of Boston-based Gibson Sotheby’s International Realty. But “in terms of the luxury market, activity in Boston proper continues to be high and the market’s very stable.”
In downtown, the median luxury condo—defined as the top 10% of the market—hit $4.25 million in the third quarter, a 55% surge compared to only a year ago, according to the latest market report from appraisal firm Miller Samuel.
Steadily rising luxury prices and limited inventory may be great for homeowners in downtown, but the competition is sending even well-heeled buyers further afield—a trend that’s likely to send prices higher in Boston’s more affordable outer ring.
“People are a little exhausted from the bidding wars; it’s not even a money thing. At some point it just gets emotionally exhausting. You just want to put in a bid and buy a home,” Ms. Rideout said.