Among Global Cities, Miami Stands Alone with the Swiftest Surge in Luxury Home Prices in the U.S.
October 20, 2023
Most cities worldwide are witnessing a notable surge in luxury home prices, but surprisingly, the United States is conspicuously absent from the top-ranking cities.
According to data from real estate consulting firm Knight Frank, Miami is often renowned for its luxurious real estate and takes the fourth spot regarding price escalations. Over the past 12 months, Miami has seen a substantial 7.5% growth, making it the only American city to register such impressive increases.
On a global scale, cities like Dubai, Tokyo, and Manila have recorded the most remarkable percentage changes, with extraordinary annual surges of 48.8%, 26.2%, and 19.9%, respectively. Notably, Dubai has maintained its position at the pinnacle of annual price growth for the past eight consecutive quarters.
Further solidifying Miami’s place in the luxury real estate arena, it’s worth mentioning that Eric Schmidt, the former chairman and CEO of Google, has recently entered the city’s market. Records reveal that Schmidt has acquired at least two properties on Sunset Island I, amounting to a combined investment of $25.3 million. Beyond residential properties, the Schmidts are also supporting the development of a five-story office building in South Beach. They possess an 88 percent stake in the entity overseeing the Fifth Miami Beach project at 944 Fifth Street and 411 Michigan Avenue. Construction on this venture commenced earlier this year, with Cushman Wakefield handling the leasing.
In contrast, some major U.S. cities have experienced a downturn in luxury home prices. Los Angeles saw a decline of 2.5%, while New York recorded a 3.9% decrease. San Francisco ranked near the bottom globally, securing the 44th position, with a substantial price decline of 11%.
The U.S. market’s challenges have primarily been attributed to inventory shortages, exacerbated by fluctuating interest rates and pandemic-induced delays in luxury development construction. The ongoing impact of COVID-19, coupled with the rise of remote work, has also prompted a significant shift in Americans’ residential preferences, with many relocating from traditional markets in states like California and New York to cities in Texas and Florida.
Knight Frank Global Head of Research, Liam Bailey, suggests that as inflation uncertainties have abated in recent months, the anticipated price adjustments in various markets may be less pronounced than expected.
Out of 46 cities examined, over 57% experienced positive price growth in the past three months, with an average quarterly growth rate of 1.5%. Nevertheless, 14 cities on the list reported price decreases over the same period. Notably, Stockholm made a remarkable leap in just one quarter, ascending from the 41st to the 10th in the latest report.
The top 10 cities with the most substantial annual growth in luxury home prices are as follows:
- Dubai: 48.8%
- Tokyo: 26.2%
- Manila: 19.9%
- Miami: 7.5%
- Shanghai: 6.7%
- Mumbai: 5.2%
- Madrid: 5.1%
- Nairobi: 4.7%
- Lisbon: 4.7%
- Bangkok: 4.6%
