B
oston's luxury home market has reached a new milestone, with the typical luxury home value surpassing $3 million. According to Zillow data, this ranks Boston eighth among the country's most competitive metro areas for luxury property values. Nationwide, the average price tag for a luxury home is around $1.8 million, but in cities like Boston and San Jose, it's significantly higher.

    San Jose tops the list with ultra-high-end home values at $5.9 million, followed by Los Angeles ($5.1 million) and San Francisco ($4.8 million). Boston's luxury home value is comparable to other coastal cities like Seattle ($3.2 million) and New York ($3.9 million), while Buffalo's luxury properties average just above $835,000.

    Over the past year, luxury home values have increased 2.7%, nearly double the growth in the broader housing market. Zillow Senior Economist Orphe Divounguy notes that despite a slower market, home prices continue to climb, making it a promising time for sellers considering listing their properties.

    In Boston, luxury home values rose 5.1% year-over-year, according to the Zillow report. Agent Bridget Fortunate attributes this increase to steady demand and pricing power, but notes that the biggest challenge is the low inventory in the $1-2 million range. Despite this, she believes it's a great time for buyers in Boston's luxury home market, with rates higher but deals available for those who can afford to buy now.

    Midwest metro areas have seen strong luxury home value growth, including Cincinnati (7.3%), Columbus (6.8%), and Chicago (6.3%). In contrast, luxury prices declined in Sun Belt cities like Austin (-2.1%) and Miami (-0.5%). The gap between luxury home prices and mid-market properties has narrowed since 2020, from 5.5 times higher to about 5 times higher today.