The rich, who got even richer in the pandemic era, are unceasingly deploying their wealth into luxury homes.
More than $40 billion worth of residential real estate valued at $10 million or higher changed hands in 2021, according to a report from real estate brokerage Compass Inc. That’s more than double the amount in 2020.
In New York’s Long Island alone, five properties — not in the Hamptons — sold for $10 million or more last year, totaling $101 million.
With the stock market booming and interest rates low, the past two years have been good to the richest 0.1%. The luxury home market in turn is being flooded by those looking to both trade up and and potentially protect their money from rising inflation. And despite the prospect of tighter Fed policy and market volatility, purchases show little sign of slowing down.
“Many look at luxury real estate as a safe and appreciating asset that’s a hedge against inflation,” Compass agent Carl Gambino said in the report.
There were more than 2,300 transactions of homes priced at $10 million or higher last year — a 112% jump from 2020. Los Angeles had the most, followed by Manhattan and Palm Beach.
For the markets growing the fastest, Austin and suburban Long Island excluding the Hamptons led the way, with each notching transaction increases of more than 400%.
Texas looks especially promising for future sales in 2022, according to the report, especially the waterfront and ranch properties there. Luxury purchases in Austin totaled almost $190 million last year, while Dallas saw $115 million, said Gaby Medonza of One West Realty International.