New Development Activity Played a Pivotal Role in Boston’s 200% Jump in Real Estate Transactions Above $10 Million

NEW YORK–New development activity played a pivotal role in the City of Boston’s 200% jump in real estate transactions above $10 million compared to previous year, according to Compass.

Compass, the largest residential real estate brokerage in the United States by sales volume, released its third annual end-of-year Ultra-Luxury Report, examining 2023 residential transactions and sales volumes at $10 million and above across 79 U.S. markets.

In a year that saw a 15.26% decrease overall in ultra-luxury sales, 1,560 homes priced at $10 million and above traded for $26.84 billion, with Manhattan claiming the top spot, and 23 markets experiencing year-over-year sales growth.

“The findings of this report are a testament to the compelling strength of the ultra-luxury sector even in the face of headwinds,” said Felipe Hernandez Smith, Head of Compass Luxury. “The continued enthusiasm for ultra-luxury properties underscores the enduring value of exceptional real estate.”

Rankings

Manhattan led all U.S. ultra-luxury markets with $4.92 billion in sales across 256 trades, followed by Greater Los Angeles, Miami Dade, and Palm Beach County.

“Amidst notable macroeconomic shifts, the ultra-luxury market in Manhattan experienced remarkable resilience over the past year,” said Stephen Ferrara of The Hudson Advisory Team at Compass New York, and forecasts “another robust performance in 2024.”

While sales in Manhattan were down for the year, they proved comparable to the levels witnessed in 2019. Conversely, on the other side of the coast, Greater Los Angeles surpassed pre-pandemic sales levels even in the face of challenges such as the implementation of a new 5.5% transfer tax on home sales above $10 million.

“The most architecturally significant homes received elevated and persistent attention,” said Sally Forster Jones of the Sally Forster Jones Group at Compass Los Angeles. “When these special properties were offered in the luxury marketplace, judicious buyers absolutely bought them and were not afraid to pay the price.”

Looking ahead to 2024, new luxury condominium offerings may keep Greater Los Angeles sales surging, according to Justin D’Adamo, Head of Compass New Development. “The ultra-luxury buyer in Los Angeles is no longer only looking for a sprawling single-family home in the hills. Instead, many buyers seek similar scale, finish, and quality in a condominium where privacy and impeccable service are paramount. New offerings in the market, such as Rosewood Residences Beverly Hills, are appealing to this buyer and fueling the new wave of high-end transactions.”

Twenty-Three Markets Experience Year-Over-Year Growth

Twenty-three markets surpassed 2022 transaction totals last year, and 28 had higher sales volumes. Among the surging markets are the City of Boston, MA; Palm Springs, CA; Jackson Hole, WY; San Diego, CA, and the Phoenix area. These markets showcased unique dwellings, desirable amenities, and attractions that appealed to high-net-worth individuals from across the globe.

Traditionally known for its historic homes, Boston is undergoing an ultra-luxury renaissance with high-flying deals in new luxury high-rise buildings.

“These properties are often affiliated with 5-star hotels and boast world-class amenities, concierge services, and multi-million-dollar views,” said Penney Gould, a Compass Boston agent. “Buyers of this caliber are drawn to services that alleviate some of the inconveniences traditionally associated with living in a historic city, such as valet parking, dry cleaning pick-ups, and in-house restaurants showcasing top design and renowned chefs. Ultimately, these properties offer residents suburban convenience at a cosmopolitan address.”

Valery Neuman, a Compass Palm Springs agent, highlighted the thriving luxury market in Palm Springs, stating, “The private clubs are particularly sought after for the exclusive lifestyle they offer. Many buyers also want to rejuvenate older properties, adding a personal touch to their desert oasis.”

Jackson Hole, known for its breathtaking landscapes and low taxes, emerged as another surging market. Breezy Mulligan, a Compass Jackson Hole agent, noted, “In our market, buyer preferences lack consistency, except for a shared emphasis on scenic views and privacy.”

With 43 sales over $10 million, San Diego was the top-ranked market by transaction volume to exceed prior year sales with a 13.15% increase as the ideal weather, world-class golf communities, and robust biotech and research industries continue to draw big spenders.

Finally, Paradise Valley sales in Arizona are driving the Phoenix area’s ultra-luxury market to new heights. “The local luxury market is thriving as a seller’s market thanks to continued demand of cash buyers and growth of the industry bringing C-level executives and entrepreneurs to the market,” said Chris Karas, a Compass Arizona agent.

As we reflect on the insights gathered from the third annual Ultra-Luxury Report, the resilience demonstrated by the ultra-luxury real estate sector throughout 2023 sets a promising tone for the year ahead, with expectations of continued growth and robust performance in 2024.