Beauty is in the eye of the beholder, but luxury homes are easier to spot—just look for the zeroes! For this week's infographic, we decided to look into the luxury markets that have changed the most since the market correction began.
We started by taking all micropolitan and metropolitan areas (regardless of housing stock) to find the areas with the largest share of high-end homes valued at $1 million or more. We evaluated these homes by their current value, and for their 2005 value. All historical data was derived from a backward application of SmartZip's Neighborhood Home Price Index (NHPI).
For example: If the 2005 HPI = 100 and the current HPI = 150, then a home with a current value of $846,870 would have a 2005 value of around $564,580.
Below, we outline the top five emerging and declining luxury home markets since 2005.
As the tech scene of San Francisco and intellectual hub of Washington, D.C., have grown, so has their demand for luxury homes, condos and rentals. And while much is being made of the “tech bro" and lobbyist salaries in these markets, the reality is that many of the emerging luxury areas match up with our least affordable markets in America breakout. We'll be watching closely to see if the salaries and savings of buyers in these markets are keeping up with the area's skyrocketing home prices.
Honolulu, Hawaii, shows the most staggering jump—from a luxury home percentage ranking of 77th in 2005 to a current ranking of 3rd. As the market rebounds, so does the demand for vacation homes in beautiful places. Despite a massive surge in luxury condo development on Oahu, an inventory shortage continues to drive prices up, especially in Honolulu.