A $1 Million Home Is No Longer The Pinnacle of Housing — Luxury Properties Are Now 60% More Expensive Than A Decade Ago

Core Insights - The definition of luxury homes has shifted significantly, with the threshold for entry-level luxury now just under $1.3 million, compared to around $1 million in 2016 [2][3][4] - The increase in luxury home prices is attributed to pandemic-era savings, low mortgage rates, and changing location preferences, resulting in a 60% rise in the entry-level luxury threshold from approximately $796,922 in 2016 to $1.3 million [4][5] - A $1 million home now only qualifies for the top 13% of listings nationally, whereas it was previously just outside the top 5% [3][4] Market Dynamics - The luxury home market is increasingly out of reach for upper-middle-income buyers, with many areas now requiring multi-million dollar investments for entry-level luxury homes [5] - In high-demand areas like Los Angeles and Santa Rosa, the entry-level luxury threshold starts at nearly $4 million and around $3.5 million, respectively [5] - The current entry luxury tier starts at about 2.9 times the median home listing price, while high-end luxury begins at 4.6 times, and ultra-luxury at 12.6 times the median [6]