Over the two years The Wall Street Journal and Realtor.com have been producing its quarterly Emerging Housing Markets Index, the U.S. housing market has seen prices soar and inventory hit record lows. And even as the market has cooled, starting in the second quarter of 2022, low inventory has kept prices from plummeting.
The Sun Belt—or the southern half of the country—has seen a lot of interest as buyers who suddenly had work-from-home freedom looked to move to warmer climates with a lower cost of living. That’s increased the visibility of many areas, particularly throughout Florida.
That’s why in the first quarter of 2023, only one city in the Sunshine state—
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Tampa,
at No. 8—made the top 10 in the latest luxury index, which was released Wednesday. That’s down from four at the end of 2021, according to Realtor.com data.
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“I think it’s fair to say the Florida market has emerged,” said Danielle Hale, Realtor.com’s chief economist.
Last quarter’s ranking mixed things up a bit, with St. Louis shooting up 15 spots to No. 1, according to the data. Boulder, Colorado, also made the top 5, as did San Jose, California.
Buyers are still headed south, however, and the top 5 also included Dallas and the Hilton Head, South Carolina area. These areas also offer buyers affordability, while allowing them to live in vibrant, growing cities in the meantime.
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The luxury segment of the index used housing data for the top 10% of 60 metropolitan areas for the ranking, which takes into account information on the real estate market and other economic measures, analyzing a number of indicators to rank the most active luxury housing markets.
Indicators include growth in housing supply and demand; median listing prices; a cost-of-living measure; small businesses; local property taxes; amenities; unemployment; wages; and the share of foreign-born residents—who contribute to the economic vitality and diversity of the area.
Here, Mansion Global counts down the top 5 cities in the luxury index.
No. 5: Dallas, Fort Worth and Arlington, Texas
The Dallas metro area took the fifth spot on the ranking, falling from No. 4 in the fourth quarter of 2022. Smack dab in the Sun Belt—and located in a state with no income tax—hasn’t seen the astronomical growth that Austin did during the pandemic.
But, the city has strong fundamentals and a growing economy, according to an early April report from the Federal Reserve Bank of Dallas. Indeed, the city registered 3.3% growth in employment, and “home sales rose following several months of decline, and inventories ticked up despite the rebound in sales,” the report said.
In addition, sales of homes priced at $10 million and more were up significantly last year—to 11 from 6 in 2021, according to a February report from Compass on ultra-luxury home sales.
“Despite the weakening global economy, we expect the Dallas luxury market to remain strong in 2023,” Compass agents Amy Detwiler and Michelle Wood said in the report. “Overall activity will likely normalize after the brisk volume seen during the previous two years, but limited inventory will keep the market in balance. While a significant portion of Dallas real estate sales is attributed to local buyers, the city’s pro-business economy continues to attract new residents from across the country.”
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No. 4: San Jose, Sunnyvale and Santa Clara, California
San Jose moved up two notches to the No. 4 spot on the ranking in the first quarter. The area is part of tech mecca that is Silicon Valley, and, with the well-publicized layoffs in the industry, its upward mobility might be a surprise to some. But Ms. Hale noted there are competing factors at play.
“Some tech companies are downsizing, but, at the same time, a lot of them are pushing return-to-office plans,” she said. “So the downsizing is a negative for San Jose, but I think the return to office brings people back closer in. It’s harder to say what the outlook is.”
Luxury and non-luxury included, the median price in San Jose was roughly $1.5 million in March, up about 10% from February, but down 15% year over year, according to a report from Christie’s International Real Estate Sereno.
“The San Jose real estate market remains in transition,” the report said. “While it is still a clear seller’s market, things are much cooler than what…
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