U.S. Luxury Second-Home Markets Saw Strong Demand, Tight Inventory at the Highest End

Strong luxury demand drove top U.S. second-home markets in January, though many continue to suffer from a dearth of inventory even at the highest end of the market, according to a slew of data from brokerage Douglas Elliman on Friday.

The number of contracts signed for luxury single-family homes in Aspen, Colorado, and Miami increased in January, while contracts in New York’s Hamptons and Palm Beach, Florida, declined due to low inventory.

There were eight contracts signed for vacation homes over $4 million in Aspen, three more than in January 2021, despite a new inventory struggle that began last spring. Five of these contracts were homes in the price range of $10 million to $19.99 million. This was the first time in eight months that single family contracts rose year over year, according to the report.

Wealthy buyers’ interest in warm climates continued as Miami recorded 195 signed contracts for single-family homes at $1 million and above in January. Contracts for homes between $3 million and $4.99 million doubled while contracts at $10 million and above showed a 140% increase.

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“Newly signed contracts for single families increased annually in two of the past three years, with a large gain in new inventory this month enabling more activity,” wrote Jonathan Miller, president of appraisal firm Miller Samuel and author of the Elliman report.

Miami trophy condos also fared well, with deals at $5 million or more quadrupling from a year ago.

Palm Beach recorded a general increase in signed contracts for homes between $1 million and $9.99 million compared to 2021, however, there was a 20% decrease for contracts $10 million and above.

“Single-family newly signed contracts have declined year over year in six of the past seven months, held back by the sharp declines in new inventory over the same period,” Mr. Miller wrote.

Meanwhile at the far eastern tip of New York’s Long Island, Hamptons trophy-home contracts priced between $1 million and $4.99 million plunged, while contracts for $10 million and above recorded an increase. As in other affluent second-home markets, the general trend of declining deals in the Hamptons is due to the lack of inventory that has been an issue for the home buyers since the pandemic hit.