"With homes selling for upward of $50 million and billionaires building compounds to disallow regular folks from taking a glance at luxury, one end of the real estate market seems to be growing exponentially. Those enormous price tags can be jarring when looking for a home, but in reality, the median price of a luxury home is far lower. The entry point of luxury, which is defined as the 90th percentile of listing prices, was $1.19 million in December, according to Realtor.com."
""Big gaps between luxury and typical home prices aren't automatically a warning sign," Realtor.com senior economist Anthony Smith said. "They often point to markets that are highly segmented, where luxury behaves differently from the rest of the housing market. In those places, even small shifts at the high end can create noticeable changes in luxury pricing without spilling over to the median home price.""
Luxury homes can sell for tens of millions, but the 90th-percentile entry point was $1.19 million in December, roughly three times the national median listing price of $399,950. Large disparities exist where luxury, mega-luxury, and typical homes sit side-by-side, and those markets can be highly segmented. In segmented markets, luxury prices can move substantially on small high-end shifts without affecting median prices. Realtor.com data show Florida contains five metros among the top 10 metros with the widest luxury gaps, and Miami surpassed New York City for the most $1 million-plus listings.
Read at Business Insider
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