(Bloomberg) — The wealthy, who have become even richer during the pandemic, are channeling their wealth into luxury homes.
According to a report by real estate brokerage Compass Inc., the value of residential real estate worth more than $40 billion changed hands by $10 million or more in 2021. This amount is more than double in 2020.
In Long Island, New York alone, five properties — not in the Hamptons — sold for $10 million or more last year, totaling $101 million.
The past two years have been good for the richest 0.1%, with the stock market rallying and interest rates down. That in turn is flooding the luxury home market with people who want to both trade and potentially protect their money from rising inflation. And despite tighter Fed policy and the potential for market volatility, buying shows little sign of slowing down.
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Compass agent Carl Gambino said in the report, “Many see luxury real estate as a safe and appreciated asset that is a hedge against inflation.”
There were more than 2,300 transactions for homes worth $10 million or more last year – a jump of 112% from 2020. Los Angeles had the most, followed by Manhattan and Palm Beach.
For the fastest-growing markets, Austin and suburban Long Island led the way except for the Hampton, each noting transactions increased by more than 400%.
According to the report, Texas looks particularly promising for future sales in 2022, particularly the waterfront and ranch properties there. Last year, luxury purchases in Austin totaled about $190 million, while Dallas saw purchases of $115 million.
To contact the author of this story:
Claire Ballantine in New York [email protected]