Anyone who’s tracked the luxury boom during the pandemic won’t be surprised to learn that ultra-high-end real estate has continued to grow year over year in America. And anyone who’s paid attention to Texas’ rapid recent growth won’t be surprised to hear that the Dallas, Austin, and Houston markets rank highly among those markets.
With the recent release of Compass’ 2023 Ultra-Luxury Report, the national real estate broker has highlighted 23 thriving markets contributing to the year’s 1,560 $10 million-plus transactions. Palm Springs and Boston boomed while Manhattan was named the number one U.S. market. But cities like Boulder and Dallas also earned a callout — the latter actually saw a 100% increase in $10 million-plus sales over 2022.
“The data collected and analyzed for the report by Compass Luxury is essential to deciphering the synergy between wealth and ultra-luxury real estate,” reads The 2023 Ultra-Luxury Report. “Where and how the ultra-wealthy choose to live have powerful impacts on both specific communities and our nation’s overall economy.”
Ahead, we’ve detailed the most important Texas takeaways from The 2023 Ultra-Luxury Report, and Compass’ real estate predictions for the year ahead.
But First, the 2023 and 2024 Ultra-Luxury Real Estate Trends
– With the sharp spike in interest rates, agents reported a notable increase in all-cash offers in 2023.
– Architecturally significant homes remained important to ultra-luxury buyers in 2023.
– Wellness-oriented amenities like cold-plunge pools and infrared saunas are becoming more prevalent in ultra-luxury properties, and will remain popular in 2024.
– Outdoor gathering spaces are still very much of interest to affluent buyers, especially when combined with things like sport courts.
The 2023 Ultra-Luxury Real Estate Report in Austin
Of the three Texas markets that made the 2023 Ultra-Luxury Report, Austin was the only city to report a decrease in $10 million-plus sales last year (a 25% decrease from 2022). Although local luxury agent Vince Heinz is optimistic about a 2024 upswing.
“The second half of 2023 saw buyers exercising great patience, creating significant pent-up demand,” Heinz notes. “This demand is expected to be further fueled by anticipated decreases in interest rates and the ongoing low inventory. As a result, high-quality homes are likely to command premium prices, while value homes are expected to move quickly.”
Local agents also note a diverse mix of local and international buyers, many of whom have a tech or entrepreneurial background.
“In 2024, I anticipate a steady performance in the ultra-luxury segment, with bespoke design and wellness-oriented amenities becoming even more prevalent,” shares Michelle Dolch of the Austin Luxury Group.
Highest Priced Austin Home Sale of a Compass Represented Property in 2023: $10.05
Amount of $10 Million-Plus Austin Homes Sold in 2023: 3
The 2023 Ultra-Luxury Real Estate Report in Dallas-Fort Worth
Of the three Texas markets featured in Compass’ Ultra-Luxury Report, Dallas-Fort Worth real estate reigned supreme.
“Homes priced over $10 million have been selling relatively faster compared to prior years, a sign of sustained interest from high-net-worth individuals who recognize Dallas real estate as a solid investment,” says Dallas agent Tom Hughes. “Looking ahead, the North Texas ultra-luxury market is expected to maintain its momentum, with sustained elevated rates likely to drive continued demand for exclusive properties.”
In terms of trends, agents noted an interest in private theaters and extensive wellness amenities, as well as an affinity for projects currently in development.
“Luxury new construction is the hottest commodity in the Park Cities and Preston Hollow. Due to lead time for building in the current environment, many buyers are opting for builder-developed projects,” shares Dallas agent Christine Danuser. “I started off 2023 with the sale of 3900 Potomac, a quality new construction listed for $13,900,000 in the heart of Highland Park.”
Highest Priced Dallas Home Sale of a Compass Represented Property in 2023: $15.55 million
Amount of $10 Million-Plus Dallas Homes Sold in 2023: 8
The 2023 Ultra-Luxury Real Estate Report in Houston
Houston also saw growth in luxury real estate sales (a nearly 75% increase from 2022), with several Texas agents noting the city’s resilience.
“The ultra-luxury market in Houston has undergone a remarkable transformation,” shares local agent Caroline Bean. “As we reflect on the year, it’s clear that Houston’s ultra-luxury real estate market has evolved to meet the demands of a dynamic and growing population, setting the stage for an exciting future in the luxury housing sector.”
Local luxury real estate agent Dee Dee Guggenheim Howes also noted the unique marketing strategies that have helped draw high-net-worth international clients to the city. “Advertising found on private jets and yachts around the globe highlights Houston as a wonderful place to call home with world-renowned architects, builders, and designers crafting luxurious homes,” Guggenheim Howes notes.
Highest Priced Houston Home Sale of a Compass Represented Property in 2023: $12.75
Amount of $10 Million-Plus Houston Homes Sold in 2023: 7
Where Texans Are Buying Second Homes
Both California and Colorado attracted affluent Texans in 2023. The luxury market in Healdsburg, which includes Sonoma County’s trendy Mill District condos and exclusive Montage properties, received global interest but saw the most U.S. buyers from New England, California, and Texas.
Texans had a particular affinity for the tony mountain town of Telluride, with its penthouses, custom homes, and Mountain Village estates.
“From a demographic standpoint, the highest concentration of ultra-luxury buyers came out of the Texas markets of Houston and Dallas, followed by significant sales originating out of Los Angeles, New York, Scottsdale, and South Florida,” says Bill Fandel, founding broker of Compass in Telluride.