Neighborhoods in Los Angeles, Orange County and San Francisco Dominate the Top 20 List of Most Expensive Homes

Home sales so far this year are lower than they were in 2013, but there’s one sliver of the housing market that’s going strong: the very top of it. Sales of the priciest 1 percent of homes are up 21.1 percent so far this year, following a gain of 35.7 percent in 2013.  Meanwhile, in the other 99 percent of the market, home sales have fallen 7.6 percent in 2014.

Luxury sales are up, and way up, in metros across the country. Ten markets have seen sales growth above 50 percent so far in 2014, and Oakland and San Jose are on pace to nearly double the number of home sales since last year in the most expensive 1 percent of the market.

As for the other 99 percent? While home sales have shown meager to modest gains in the non-luxury portion of the market in Oakland (up 2.2% over last year), Miami (up 1%), Raleigh-Durham (up 1.2%) and Atlanta (up 4.8%), other markets including Phoenix (down 15.7%) and Minneapolis (down 12.5%) display a strange (and perhaps troubling) dichotomy: For the top 1 percent, the housing market is still booming. But for the rest of the market, the recovery is running out of gas. As home prices have risen, wage and job growth have failed to keep up.

The price to reach the top 1 percent of the housing market varies widely by metro. In San Francisco, the most expensive 1 percent of homes sold for $5.35 million or more. In Los Angeles, joining the high-end luxury market will set you back at least $3.65 million, but if you’re willing to live a bit farther south in Orange County, you can squeeze into a luxury home for just $3.45 million. The budget luxury buyer could look to Atlanta ($861,000), Minneapolis ($881,000) or Raleigh ($815,000), where access to the top 1 percent of the market can be purchased for six figures rather than seven.

So who can afford these luxury homes? Banks don’t offer conventional loans for homes in this price range. But to put things in perspective, here’s what it would take: In San Francisco, a luxury homebuyer would need a million-dollar down payment and an annual salary of $916,000 to qualify for a 30-year fixed-rate loan, and to afford what would be a $21,369 monthly mortgage payment. In a lower-priced luxury market such as Raleigh, an annual income of just $140,000 could keep a buyer comfortably among the 1 percent in this hypothetical scenario.

Of course, like 44.7 percent of buyers in this price tier, you may prefer to pay with cash.  That’s compared with the 32 percent of purchases made with cash among all home sales, as we found in our report on all-cash transactions.

The Top Luxury-Home Hoods

We looked at home sales in neighborhoods within each market to find where the highest-end luxury homes were being purchased. These are the neighborhoods with the highest average home sale price within the top 1 percent of the market.  Neighborhoods in Los Angeles, Orange County, and San Francisco dominated the top 20 list. Beverly Glen ($11.86 million), Holmby Hills ($9.91 million), and Malibu Road ($9.51 million) took the top three spots out of all neighborhoods analyzed.

Metro	Neighborhood	Average Luxury Price
Atlanta, GA	Brookhaven	$1,359,000
	Northside	$1,322,000
	Chastain Park	$1,303,000
Austin, TX	River Place	$2,336,000
	Tarrytown	$1,803,000
	Town Lake	$1,729,000
Baltimore, MD	Inner Harbor	$1,545,000
	Federal Hill	$1,504,000
	South Baltimore	$1,504,000
Boston, MA	Back Bay	$4,451,000
	Beacon Hill	$3,878,000
	West Cambridge / Huron Village	$3,227,000
Charlotte, NC	Myers Park	$1,534,000
	Ballantyne	$1,405,000
	The Arboretum	$1,361,000
Chicago, IL	Gold Coast	$2,296,000
	Streeterville	$2,152,000
	Lincoln Park	$2,138,000
Denver, CO	Downtown	$1,809,000
	Country Club	$1,772,000
	Cherry Creek	$1,732,000
Fort Lauderdale, FL	Harbor Beach	$3,036,000
	Golden Isles	$1,912,000
	Coral Ridge	$1,724,000
Las Vegas, NV	The Lakes	$1,413,000
	Macdonald Highlands	$1,387,000
	Las Vegas Strip	$1,381,000
Los Angeles, CA	Beverly Glen	$11,856,000
	Holmby Hills	$9,910,000
	Malibu Road	$9,513,000
Miami, FL	South Beach	$5,552,000
Oakland / East Bay, CA	Piedmont	$2,587,000
	Claremont	$2,431,000
	Berkeley Hills	$2,321,000
Orange County, CA	Lantern Village	$7,184,000
	Emerald Bay	$5,838,000
	Crystal Cove	$5,781,000
Philadelphia, PA	Rittenhouse Square	$1,968,000
	Wayne	$1,627,000
	Fitler Square	$1,498,000
Phoenix, AZ	DC Ranch	$1,961,000
	Desert Mountain	$1,726,000
	Troon	$1,723,000
Portland, OR	Forest Park	$1,582,000
	Forest Highlands	$1,492,000
	Southwest Hills	$1,467,000
Raleigh-Durham, NC	Hope Valley	$1,465,000
	Hasentree	$1,168,000
	Govenors Club	$1,124,000
Riverside, CA	Old Las Palmas	$1,752,000
	Deer Creek	$1,305,000
	South Corona	$1,305,000
Sacramento, CA	Lake Tahoe	$2,120,000
	Lahontan	$1,683,000
	Sierra Oaks	$1,632,000
San Diego, CA	La Jolla Shores	$4,133,000
	Leucadia	$3,865,000
	Muirlands	$3,308,000
San Francisco, CA	Presidio Heights	$7,478,000
	Pacific Heights	$7,177,000
	Russian Hill	$6,532,000
San Jose, CA	Old Palo Alto	$4,714,000
	Crescent Park	$3,933,000
	North Los Altos	$3,859,000
Seattle, WA	Harrison / Denny Blaine	$3,429,000
	Downtown Bellevue	$2,771,000
	Laurelhurst	$2,758,000
Ventura, CA	Westlake Village	$2,548,000
Washington, DC	Georgetown	$2,895,000
	Rosslyn	$2,539,000
	Kalorama Heights	$2,490,000

Most Unequal Metros

We also compared the price of the top 1 percent of homes with the price of the median home in each market to measure the distance between the middle and top of the housing market. The largest divides appear in the sunny, coastal metros. The top 1 percent of home prices in Miami were at least 14.9 times higher than the median, and those in West Palm Beach were at least 14.1 times higher. Yet in lush but rainy Portland, Oregon (3.9 times the median), or lush but muggy Raleigh, North Carolina (4.1 times the median), the luxury end of the market is relatively closer to the median home sale price.

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