Good afternoon, and thank you for subscribing to Building Austin, our weekly newsletter focused on real estate, growth and development in the Austin region. I’m Shonda Novak, the American-Statesman’s real estate reporter.
Despite fluctuating mortgage interest rates and economic uncertainty, the uber wealthy are still buying high-dollar homes in the Austin market, according to real estate agents and a new report from Compass, a leading luxury brokerage.
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In a recent email, Austin luxury real estate broker Eric Moreland told me that demand remains strong in the local market for homes priced at $8 million and up, most notably in the upscale areas of West Lake Hills and Lake Austin.
Beth Drewett, a luxury agent with Compass, said the Austin area has “some pent-up demand” and that many luxury buyers will step off the sidelines this year.
“In 2024, Austin will remain a magnet for diverse ultra-luxury buyers—tech entrepreneurs, entertainment elites and investors in pursuit of exclusivity,” Drewett said. “Their attraction stems from the city’s vibrant culture, strong economy and a lifestyle blending urban sophistication with nature. Demand for luxury homes reflects this varied taste, from the limited number of Lake Austin waterfront properties within close proximity to downtown as well as estates showcasing breath-taking Hill Country views.”
Last year, three “ultra-luxury” homes — those priced at $10 million or more — changed hands in the Austin area, in sales where a Compass agent represented a buyer or seller. That’s according to Compass’ latest annual luxury home sales report. The three sales totaled $34.4 million, Compass said.
In 2022 and 2021, Compass reported four sales each in the ultra-luxury price range by its Austin-area agents, although none in 2020, the year the pandemic hit.
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The Compass report doesn’t include private off-market sales, which typically have substantially higher asking prices than those that are publicly marketed through the Multiple Listing Service (MLS) database, real estate agents say. In his recent email, Moreland said the demand he’s seeing for luxury homes is both for MLS properties, as well as for off-market listings.
Compass said the highest-priced sale in the Austin area in which a Compass agent represented the seller went for $10.05 million. That was a listing in West Lake Hills area by Jenny Walker.
The highest-priced sale in which a Compass agent, Damon Brown, represented the buyer was a home in Spicewood in western Travis County. The home sold for an undisclosed amount but its last listed price was $7.75 million.
Compass compiles the report to provide insights into the ultra luxury market and champion its agents who list and sell them, said Felipe Hernandez Smith, head of Compass’ luxury division.
Brown said ultra-luxury sales continue to thrive in Austin, “fueled by the sustained influx of high-net-worth, out-of-state buyers seeking Austin’s unique way of life.”
Although Compass’ report doesn’t include listings on the silent market, “Austin’s allure as a haven for privacy and luxury living is driving the continued success of its off-market real estate sector,” Brown said. “Now, more than ever, buyers and sellers need to have an agent that is plugged in to find off-market opportunities that are not available via a general internet search.”
Walker said he’s seen firsthand the Austin luxury market’s sustained momentum since the pandemic.
“Looking ahead, the recent acquisition of Realty Austin by Compass has positioned both teams to thrive in the 2024 ultra-luxury market, as the synergy between Realty Austin and Compass creates unparalleled opportunities for discerning buyers and sellers in the Austin luxury real estate market, Walker said.
Compass’ 2023 luxury report shows that the uber wealthy are “willing to pay ever-rising prices for trophy homes and properties,” Austin-area luxury agents Gary and Michelle Dolch said in the report.
The report noted that “where and how the ultra-wealthy choose to live has powerful impacts on both specific communities and our nation’s overall economy.”
The report quotes a New York Compass agent as saying that even as “financial markets defied predictions and surged to new heights, ultra-luxury real estate also enjoyed unexpected year-over-year sales volume growth in 28 key markets in 2023, and 23 markets had more ultra-luxury sales than in 2022.”
Manhattan ranked as the nation’s No. 1 market for ultra luxury real estate, with $4.92 billion in sales last year, bumping the greater Los Angeles area to the No. 2 spots.
South Florida, Silicon Valley, Orange County, the Hamptons and Aspen, Colo., also remain among the most robust ultra-luxury markets in the US, the report said.
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