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October 26, 2014

Luxury Comes at Different Costs

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Luxury Comes at Different Costs

Local markets equate luxury housing differently. For example, in Los Angeles, the luxury market may come at about $4 million and up – that is double the amount Nick Segal of Partners Trust says that he would have put it at eight years ago. But in Houston, luxury housing could come at about a $1 million price tag, largely driven by double-income households of young entrepreneurs, says Martha Turner of Martha Turner Sotheby’s International Realty.

A panel speaking at the National Association of Real Estate Editors’ annual conference this week tried to put a price tag on luxury. For most markets outside of the metro areas, luxury is at about $500,000, said Frank Malpica or ERA Franchise Systems.

The amenities that constitute luxury can vary quite a bit by region too. For example, panelists noted that media rooms are popular in Los Angeles, and fireplaces in luxury homes are shrinking and changing since new homes can no longer have wood-burning fireplaces. In Houston, media rooms are decreasing in popularity while home elevators are increasing, particularly in luxury town homes with five stories. Also, more contemporary styled homes are entering the market, a change from the Tuscan villa look that once dominated the luxury market.

One amenity becoming popular among luxury markets: Generators. More luxury home owners are building safeguards into their home in the event of hurricanes or earthquakes. Lifestyle-related amenities are also gaining steam, especially as millennials move up in the housing market, and they search for homes on the lakefront, golf courses, or riverfront properties, Malpica notes.

Source: “Local Markets Dictate Price, Features of Luxury Housing,” The Los Angeles Times (June 12, 2014)

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