You’ve thumbed the glossary magazines, scanned the listings pics, binge-watched all the residential real estate shows. And still, you’re not sure what counts as luxury real estate, exactly. Is it a property priced at $1 million-plus? A home with more than 3,500 square feet? A mansion made of marble and exotic woods with hand-blown glass windows and a diamond-paved driveway?
Mostly, it’s the money: Sales price is the main determinant of a luxury property, says Realtor Mike McCann, head of The Mike McCann Team, Keller Williams Philly. But there’s no one number. If you want a price tag, luxury properties typically cost $2 million to $40 million, says Richard Haddad, Managing Editor, Seller Resource Center at HomeLight, a real estate agents’ network.
But some shy away from figures, preferring percentages: i.e., luxury properties are the top 10 percent of the listed homes in any given market, Haddad suggests. For example, the RE/MAX Collection, the luxury division of RE/MAX, requires each of its listings to be twice the average sold price of local properties, says Amber Bonasoro, executive director, luxury at RE/MAX.
So, in truth, “the definition of luxury real estate might differ based on the market and overall location,” as Haddad puts it. Read on for a more detailed look at the rarified world of high-end real estate — all the better to understand what “luxury” means if you are looking to buy a home or to sell one.
What does a luxury home cost?
Well, if you have to ask, you probably can’t afford it…
Seriously, in dollar terms, seven figures for a single-family home seems to be a generally accepted figure around the U.S. for defining what’s luxe. In terms of real estate nationwide, the median luxury home sales price as of July 2022 was $1.31 million, according to the August report of the Institute for Luxury Home Marketing, a credential-awarding and research group for real estate agents specializing in high-end residential properties. (The Institute sets a median threshold price of $912,500 for luxury homes).
Coming up with a similar figure is Redfin, which defines luxury real estate as the top 5 percent of properties, based on market value, in a region. The real estate brokerage’s analysis of luxury sales in early 2022 found that the national median sales price for this segment was $1.15 million.
But as Redfin and RE/MAX Collection’s criteria suggest, luxury can be relative: “It all depends on what your average sales price is in your marketplace,” says McCann. Since this varies dramatically nationwide, so too does the threshold per region – or even zip code. For example, in his area, Philadelphia, the average …….