Big Cities Make a Comeback in the Latest WSJ/Realtor.com Luxury Rankings
October 19, 2021
While scenic second-home locale Santa Barbara, California, held on at No. 1, major U.S. metros, including Dallas and San Francisco, shot up the list of hot high-end housing markets
BY LIZ LUCKING | MANSION GLOBAL
For the second time, Santa Barbara, California, topped the luxury segment of the Wall Street Journal/Realtor.com Emerging Housing Markets Index, demonstrating the continuing popularity of verdant and coastal second-home markets in the U.S.
However, in a reflection of the changing sentiments toward city living, some major metropolitan areas have begun to creep up the list of the hottest markets in the third iteration of the quarterly list, released Tuesday.
“As far as the areas that are seeing some change in the rankings, it’s areas that, in many ways, are larger city areas,” Danielle Hale, chief economist for Realtor.com, told Mansion Global. “We’re starting to see some improvements.”
Ranking second, the Nashville metropolitan area was the highest-ranked large city in the index, according to the figures. The Tennessee city and country-music capital moved up from 5th place in the last edition of the ranking, released in July.
Naples, Florida, ranked fifth this time around, up from 17th in the second quarter, and Dallas took 13th place, shooting up 12 spots from 25th.
Emerging Luxury Housing Markets
“Before the pandemic these big cities had been doing quite well,” but had “fallen out of favor in the early part of the pandemic,” as people looked for space and solitude, Ms. Hale said.
“Now we’re seeing people getting more comfortable returning,” she said.
The index, based on third-quarter housing data, uses a slate of indicators to assess the prosperity of emerging housing markets. Those include growth in housing supply and demand; median listing prices; unemployment; wages; a cost of living measure; small businesses; amenities and the share of foreign-born residents—who contribute to the vitality and diversity of the area. Local property taxes are also considered.
The 60 metropolitan areas reviewed within the luxury segment of the Emerging Housing Markets Index are ranked based on housing data for the top 1% of each market.
The San Francisco metro area recorded the largest jump up the charts of any city in the luxury rankings, going from 39th to 24th, up 15 places.
“All our market segments have gone crazy, but the luxury segment has probably gone craziest,” said Patrick Carlisle, chief market analyst at Compass based in the Bay Area.
“I do think people have gotten much more comfortable with the idea of living in the city again,” he said.
Plenty of people, in their initial response to the pandemic, moved out “to big open rural counties,” Mr. Carlisle said. “And many found out that they were bored.”
Many who moved north to California wine country or other rural areas are now missing city life, he said. “It’s nice having some land around them, but they really missed everything they loved about the city,” he added. “I do think a fair number of those people are moving back.”
(Mansion Global is owned by Dow Jones. Both Dow Jones and Realtor.com are owned by News Corp. The Wall Street Journal is also owned by Dow Jones.)
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