Boston Metropolis Ranks 8th in the United States for Luxury Home Prices

If you are rich, I have bad news for you. You need to get even richer.

Especially if you live in the Boston metro area and around Providence.

Real estate values ​​for “luxury” properties (the top 5 percent of homes in a region) in the Boston metropolitan area increased 5.8 percent year over year, with an average value of $2,698,471 in June, according to an analysis released by Zillow on July 31.

In Providence, the typical value of a luxury home was $1,861,985, an increase of 7.8%, making it the 14th most expensive home in the country.

Compare those numbers to the national average: a 3.9% year-over-year growth for a typical luxury home value of $1,619,685.

And the inventory of luxury homes on the Boston metro market increased 13.7% year over year, compared to a national average of 15.7%.

In Providence, that figure increased by 30.5 percent.

Boston Metropolitan Market Continues to Grow

The Boston metropolitan area ranks eighth for typical luxury home values:

(The U.S. metro area that saw the strongest growth in luxury home values ​​in June was Richmond, Virginia: up 16.5 percent with a typical luxury property value of $1,152,228.)

Zillow’s report says luxury home values ​​tend to grow more slowly because the buyer pool is much smaller. In the Boston metropolitan area, mid-range homes (the middle third of homes on the market) saw their average value increase 7.2 percent year over year.

In the United States, luxury properties remain on the market for an average of 24 days before being accepted. In the Boston metropolitan area, this period is only 17 days, two days more than in June 2024. In Providence, it is 20 days.

While 20.4% of luxury homes on the market in the United States experienced a price decrease as of June 2024, only 16% of properties in the Boston metropolitan area in this price category did so.

Here’s a three-year comparison of luxury listings in the Boston and Providence metro areas:

What is driving the demand for luxury homes?

The report says luxury home buyers are less affected by higher mortgage rates than regular home buyers. With mortgage rates remaining consistently high, “many will be able to pay cash and avoid paying their mortgage altogether,” said Anushna Prakash, an economic researcher at Zillow.

Elaine Bannigan, founder of the Pinnacle Group at Douglas Elliman, had similar thoughts.

“A luxury buyer tends to be a cash buyer,” Bannigan said.

Our own geography could also be at stake.

“Say Pulte [Homes] “The builders who come in and buy a large available lot are building 50 homes, 100 homes, 200 homes or more in some cases, which is significantly reducing the deficit. We don’t necessarily have large tracts of land available. So these big builders are not going to come in and build 50 luxury homes,” Bannigan said. “The luxury builder is typically the small custom builder who gets a nice piece of land in a nice location and builds a big house on it… something that they can put a premium price on. Why? Because they paid a premium price for the land. They pay a premium price for labor and they pay a premium price for materials.”

Bannigan said the regional difference in statistics depends on factors such as “where the jobs are or where you might like [to buy] a holiday home.