Austin Business Journal writes, "The nation's hottest luxury housing market can be found in Denver, Colorado.
That’s according to The Business Journals’ latest analysis of the country’s hottest housing markets, which analyzed ZIP-code-level mortgage and real estate data provided by Intercontinental Exchange Inc. to determine the top luxury housing markets.
The analysis was limited to ZIP codes that had an average sale price of $1.5 million or greater and a minimum number of listings sold of 10 during the most-recent quarter.
Denver, Colorado’s 80246, which had an average list price of $1.2 million, topped the list. That price in 80246 was up 64% year-over-year and 14% compared to the second quarter.
The rankings aren’t meant to highlight the most-expensive or the most-popular markets, although some of those are on the list. Instead, the rankings spotlight ZIP codes where activity is surging, prices are dramatically rising, or homes are selling at a faster pace.
California claimed 35 of the 100 hottest luxury markets and three of the top 20. Of The Business Journals’ 289 hottest luxury housing markets, Los Angeles ZIP codes accounted for 18%, followed by San Jose (6%), and San Francisco and San Diego (both 4%).
“In California, the story is nuanced,” said Orphe Divounguy, senior economist at Zillow Group Inc. “In San Diego, luxury home values are flat on a year-over-year basis, but [they] are still up a solid 2.8% in the Los Angeles metropolitan area and a moderate 1.4% in the San Francisco region.”
As prospective buyers grapple with economic uncertainty, residential real estate inventory in general has ticked up in recent months, and sale prices have subsequently cooled. However, luxury markets — identified as ZIP codes with an average home price of at least $1.5 million — have tended to be more insulated.
Between the second quarter and third quarter, the average sale price among the hottest luxury ZIP codes increased 2%, and year-over-year that change was 7%. Since 2019 — before pandemic-driven dynamics upended the nation's housing market — the average has jumped 59%, according to The Business Journals' research.
By comparison, the overall residential market saw a loss of 0.9% in average sale price compared to last quarter and a 2.3% year-over-year gain, with a 56.3% jump from pre-pandemic times.
“Similarly to other tiers of the market, interest rates, income [and] financial wealth matter for housing demand and house prices, … [but] while wealthy investors, especially cash buyers, aren’t particularly concerned about mortgage rates, the luxury market is perhaps even more sensitive to interest rates because higher rates make other safer investments, like bonds, more attractive,” Divounguy said. “The increase in the price of other assets like stocks has also encouraged people to stay invested.”
Luxury prices surge on coasts and beyond
While California led the way at the state level for the hottest luxury markets, East Coast hotspots like The Hamptons have also seen a bump in sales. Case in point: East Quogue 11942, part of a tiny hamlet adjacent to Southampton, New York, has seen a 109.3% sale-price increase compared to 2019.
Third-quarter sale prices in East Quogue 11942 averaged $1.5 million, though that figure does pale in comparison to some of the more-palatial Hamptons properties. As The Business Journals' research pulls from local MLS records, many top-tier private sales are not tracked. However, The Wall Street Journal recently reported approximately 20 homes in The Hamptons sold for $20 million or more since the beginning of the year.
Real estate insiders note some former New Yorkers who decamped to Florida during the pandemic have begun returning to the area to snap up vacation homes and escape the South's harsh summers, especially now that interest rates have eased.
“In general, housing investments are positively correlated with GDP and tend to lead the rest of the economy. Although activity can increase or fall rapidly, prices in the luxury market tend to be less volatile than the rest of the market,” Divounguy said. “This is because luxury homeowners are rarely forced to sell. They have options and sit out the market when demand is somewhat weaker.”
That said, over the past five years, ZIP code 28747, located adjacent to Lake Toxaway, North Carolina, had the strongest luxury market sales-price growth and ranked No. 2 overall on The Business Journals' list for the third quarter of 2025. Nestled amid the Blue Ridge Mountains, the community surrounds North Carolina’s largest private lake and has been a secluded getaway for generations of America’s most illustrious families, including the Fords, Edisons and Rockefellers.
The average home-sale price in 28747 jumped from $491,441 pre-pandemic to $2.4 million in this year's third quarter. Over the past 12 months, the lakeside luxury market had a 152% growth rate, with a 78% jump between the second and third quarters of this year.
Price growth continues in former migration hotspots
Out West, several smaller communities — including 86005 in Flagstaff, Arizona, and 84036 in Kamas, Utah — also have seen significant sales-price growth since 2019, at 268% and 223%, respectively. And despite a pandemic-era construction boom that flooded Florida’s overall residential market, two larger urban areas have seen steady price gains in the luxury segment.
St. Petersburg 33701 came in at No. 5 on The Business Journals' list. The ZIP code posted a sales-price gain of 203% compared to 2019, with the average sale price rising from $499,438 to $1.5 million. Year-over-year growth was 66%; quarter-over-quarter growth was 59%.
Fellow Florida ZIP code 33160, located in North Miami Beach, has had a gain in its average sale price of 198% compared to pre-pandemic levels. Homes in that community sold for an average of $531,325 in 2019, but that average rose to $1.6 million this year. The coastal enclave posted an annual gain of 24.9% and was up 22.2% quarter-over-quarter.
Comparatively, the average sale price in metro Miami-Fort Lauderdale during the third quarter was $826,719, according to The Business Journals' research, while Tampa-St. Petersburg’s average metro sale price was $592,574.
Historically, ZIP codes that have experienced the most-substantial growth at the top end of the market have been clustered near the nation’s largest metros or adjacent to tech hubs. But with the rise of remote work — which became all but ubiquitous for the knowledge sector during the pandemic — many high-net-worth individuals and their families fled expensive coastal metros for sunny climates that offered plenty of outdoor recreation.
Golf communities still a strong driver of growth
Luxury housing markets in migration hot spots like Arizona and Florida experienced explosive price growth in recent years. While some ZIP codes in those states have cooled, others remain resilient, often sustained by top-tier amenities.
For example, Flagstaff, Arizona ZIP code 86005 — No. 3 on The Business Journals’ list — is home to three popular gated golf communities: Forest Highlands, Flagstaff Ranch and Pine Canyon. The area has become a prime example of a location with sustained demand for second residences that have exceptional amenities, becoming popular among people from both inside and outside the state.
“For local Arizonans, these [communities] serve as the ultimate summer escape from the Valley’s heat, offering everything from family-friendly activities to social events and tournaments for adults,” said Larissa Hoss, a Phoenix-based Realtor with Compass who specializes in the luxury market. “These clubs throw incredible member events all season long, so it’s like summer camp for kids and grown-ups. Beyond the gates, residents also enjoy quick access to Sedona, a 45-minute drive away.”
Buyers who are drawn in by the luxury lifestyle, recreation opportunities and beauty of Flagstaff’s mountains often end up paying cash for a second or third residence, Hoss said. While summer months see a spike in interest as outsiders flock to the area for golf, come winter, there are far more buyers than properties available.
“Many [properties] on the market require updates or full renovations, and for buyers purchasing second homes, the idea of managing a remodel from afar isn’t appealing,” she said. “Most prefer move-in ready and updated, which has created even more demand for newer builds or fully renovated properties.”
Among new construction and remodeled homes, features such as open floor plans, chef kitchens, custom bars, media rooms and expansive patios with panoramic views are highly desirable, Hoss said.
“Buyers value turnkey quality with minimal maintenance, making resort-style living the central focus,” she said."
Source: Austin Business Journal
Written by: Joanne Drilling
Published: January 4, 2025
Posted by Grossman & Jones Group on
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